10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended December 31, 2016.

OR

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from         to         .

Commission File Number: 000-29913

CONCIERGE TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Nevada	90-1133909
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

29115 Valley Center Rd. K-206

Valley Center, CA 92082

866-800-2978

____________________________________________________

(Address and telephone number of registrant's principal

executive offices and principal place of business)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒   Yes     ☐    No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  ☒   Yes     ☐    No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐   (Do not check if a smaller reporting company)	Smaller reporting company	☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐   Yes     ☒   No

As of February 10, 2017, there were 886,753,847 shares of the Registrant’s Common Stock, $0.001 par value, outstanding and 13,108,474 shares of its Series B Convertible Voting Preferred Stock, par value $0.001.

TABLE OF CONTENTS

	Page
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	34
Item 4. Controls and Procedures.	34
Part II. OTHER INFORMATION	35
Item 1. Legal Proceedings.	35
Item 1A. Risk Factors.	35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	35
Item 3. Defaults Upon Senior Securities.	35
Item 4. Mine Safety Disclosures.	35
Item 5. Other Information.	35
Item 6. Exhibits.	36
Signatures	38

2

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

Index to Financial Statements

Documents	Page
Condensed Consolidated Balance Sheets as of December 31, 2016 and June 30, 2016 (Unaudited)	4
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended December 31, 2016 and 2015 (Unaudited)	5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2016 and 2015 (Unaudited)	6
Notes to Unaudited Condensed Financial Statements	7

Organization and Business Overview

On May 26, 2015, a new wholly-owned subsidiary of Concierge Technologies, Inc. (the “Company” or “Concierge”) named Kahnalytics, Inc. (“Kahnalytics”), was established in the State of California for the purpose of taking on the segment of the business retained in the spinoff of Janus Cam and to direct resources towards the further development of data processing capabilities intended for risk management used by vehicle insurance companies. As of September 30, 2016, Kahnalytics ended its sale of camera hardware to insurance companies and began providing an online platform where subscribers to the Kahnalytics Fleet Management Service (“FMS”) can track their vehicles, view event video clips, see programmable alert functions and use the live-streaming function to operate in-vehicle cameras in real time.

On August 11, 2015, Concierge acquired all of the issued and outstanding stock in Gourmet Foods, Ltd., a New Zealand corporation (“Gourmet Foods”) located in Tauranga, a commercial-scale manufacturer of New Zealand meat pies under the brand names “Ponsonby Pies” and “Pat’s Pantry”. Gourmet Foods distributes its products through major grocery store chains, convenience stores, small restaurants and gasoline station markets. The purchase price of $1,753,428 was paid in cash.

On June 2, 2016, Concierge acquired all of the issued and outstanding stock in Brigadier Security Systems, a Canadian corporation (“Brigadier”) located in Saskatoon, Saskatchewan. Brigadier sells and installs alarm monitoring and security systems to commercial and residential customers under brand names “Brigadier Security Systems” and “Elite Security” throughout the province of Saskatchewan with offices in Saskatoon and Regina. The purchase price of $1,540,829 was paid in cash.

On December 9, 2016, Concierge acquired all of the issued and outstanding stock in Wainwright Holdings (“Wainwright”), a Delaware corporation, controlled as a group by our CEO and majority shareholder Nicholas Gerber together with affiliated shareholder Scott Schoenberger. Wainwright operates 13 investment funds in the commodities market with a total of approximately $4.5 billion under management. Wainwright earns revenues from contractual agreements providing for commissions and other expenses charged against the funds. The purchase price was paid in a stock-for-stock exchange whereby the sellers of Wainwright shares received in the aggregate a total of 818,799,976 shares of our common stock and 9,354,119 shares of our Series B Voting, Convertible, Preferred stock.

3

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	December 31, 2016	June 30, 2016
ASSETS		As Adjusted
CURRENT ASSETS:
Cash & cash equivalents	$7,080,786	$5,454,107
Accounts receivable, net	749,423	839,220
Accounts receivable, related parties	2,202,684	2,124,105
Inventory, net	496,037	436,541
Investments	837,546	993
Other current assets	1,263,521	755,509
Total current assets	12,629,997	9,610,477
Restricted cash	13,847	-
Property and equipment, net	1,036,045	1,166,693
Goodwill	219,256	219,256
Intangible assets - net	958,256	1,018,213
Long term assets	1,723,342	1,526,154
Total assets	$16,580,743	$13,540,793
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$2,941,669	$2,396,017
Accounts payable, related parties	939,385	448,930
Purchase consideration payable	-	214,035
Notes payable - related parties	3,500	8,500
Notes payable	8,500	8,500
Convertible Promissory Notes Payable - related parties, net	600,000	600,000
Total liabilities	4,493,054	3,675,982
Commitments & Contingencies
Convertible, Preferred stock, 50,000,000 authorized par $0.001
Series B: 13,108,474 issued and outstanding at December 31, 2016 and June 30, 2016	13,108	13,108
	13,108	13,108
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value; 900,000,000 shares authorized; 886,753,846 shares issued and outstanding at December 31, 2016 and at June 30, 2016	886,754	886,754
Additional paid-in capital	9,058,605	9,058,605
Accumulated other comprehensive income (loss)	(99,702)	(29,503)
Retained Earnings (Accumulated Deficit)	2,228,923	(64,154)
Total Stockholders' equity	12,074,580	9,851,702
Total liabilities and Stockholders' equity	$16,580,743	$13,540,793
The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	For the Three-Month Periods Ending		For the Six-Month Periods Ending
	December 31,		December 31,
	2016	2015	2016	2015
		As Adjusted		As Adjusted
Net revenue
Fund management - Related Party	$6,472,531	$5,645,696	$12,840,475	$10,941,614
Food products	1,203,521	996,563	2,394,081	1,610,923
Security alarm monitering	828,114	-	1,641,660	-
Other	25,039	(3,500)	89,566	117,700
Net revenue	8,529,205	6,638,759	16,965,782	12,670,237
Cost of revenue	1,077,615	680,083	2,190,634	1,248,184
Gross profit	7,451,590	5,958,676	14,775,148	11,422,053
Operating expense
General & administrative expense	1,447,595	1,103,195	2,731,254	3,788,994
Fund operations	1,335,265	1,029,646	2,769,467	1,029,646
Marketing	1,051,152	729,691	1,831,683	1,345,440
Depreciation	101,188	58,487	199,830	96,676
Salaries and compensation	1,909,832	1,330,358	3,260,053	1,517,535
Total Operating Expenses	5,845,031	4,251,378	10,792,286	7,778,291
Income from operations	1,606,559	1,707,299	3,982,862	3,643,762
Other income (expense)
Other income	2,636	4,512	6,816	4,393
Interest Income	-	1,604	-	3,297
Interest expense	(5,711)	-	(5,689)	-
Total other expense	(3,075)	6,116	1,127	7,689
Income before income taxes	1,603,484	1,713,414	3,983,989	3,651,452
Provision of income taxes	(587,038)	(764,340)	(1,657,049)	(1,365,358)
Net Income	$1,016,446	$949,074	$2,326,940	$2,286,094
Other Comprehensive Income (Loss)
Foreign currency translation gain (loss)	4,714	69,847	(92,581)	(16,357)
Comprehensive Income	$1,021,161	$1,018,921	$2,234,359	$2,269,737
Weighted average shares of common stock
Basic	886,753,846	886,753,846	886,753,846	886,753,846
Diluted	1,153,666,000	1,148,923,323	1,153,666,000	1,148,923,323
Net income per common share
Basic	$0.00	$0.00	$0.00	$0.00
Diluted	$0.00	$0.00	$0.00	$0.00

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Six-Month Periods Ended December 30,
	2016	2015
CASH FLOWS FROM OPERATING ACTIVITIES:		As Adjusted
Net Income	$2,326,940	$2,286,094
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	199,830	96,676
Loss on disposal of equipment	6,220	-
(Increase) decrease in current assets:
Accounts receivable	62,600	189,464
Accounts receivable - related party	(78,579)	(194,989)
Deferred taxes	(197,188)	362,883
Prepaid income taxes	(437,499)	263,368
Inventory	(74,549)	74,140
Other assets	(86,423)	(14,115)
Increase (decrease) in current liabilities:
Accounts payable & accrued expenses	601,393	435,981
Expense waivers payable - related party	490,455	360,973
Net cash provided by operating activities	2,813,200	3,860,475
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition of subsidiary net of subsidiary cash acquired	(214,035)	(1,519,802)
Purchase of equipment	(47,346)	(110,585)
Purchase of investments	(842,994)	(493,047)
Net cash used in investing activities	(1,104,374)	(2,123,434)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of related party loan	(5,000)	-
Purchase of treasury stock	-	(2,200,557)
Net cash used in financing activities	(5,000)	(2,200,557)
Effect of exchange rate change on cash and cash equivalents	(77,147)	(27,677)
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS	1,626,679	(491,193)
CASH & CASH EQUIVALENTS, BEGINNING BALANCE	5,454,107	3,353,274
CASH & CASH EQUIVALENTS, ENDING BALANCE	$7,080,786	$2,862,081
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest paid	$5,000	$-
Income taxes paid	$2,200,800	$2,110,000
The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1.

ORGANIZATION AND DESCRIPTION OF BUSINESS

Concierge Technologies, Inc., (the “Company” or “Concierge”), a Nevada corporation, was originally incorporated in California on August 18, 1993 as Fanfest, Inc. On March 20, 2002, the Company changed its name to Concierge Technologies, Inc. The Company’s principal operations include Wainwright Holdings, Inc. a Delaware corporation (“Wainwright”). Wainwright is a holding company that currently holds both United States Commodity Funds LLC (“USCF”) and USCF Advisers LLC (“Advisers”), an investment adviser registered under the Investment Advisers Act of 1940, as amended; Gourmet Foods, Ltd. (“Gourmet Foods”), a manufacturer and distributor of meat pies in New Zealand; Brigadier Security Systems (2000) Ltd. (“Brigadier”), a provider of security alarm installation and monitoring located in Canada; and Kahnalytics, Inc. a California corporation(“Kahnalytics”), providing vehicle-based live streaming video and event recording to online subscribers.

NOTE 2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Accounting Principles

The Company has prepared the accompanying financial statements on a condensed consolidated basis. In the opinion of management, the accompanying unaudited condensed consolidated balance sheets and related interim statements of income and comprehensive income, and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation, prepared on an accrual basis, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s 2016 Form 10-K filed on October 21, 2016 with the U.S. Securities and Exchange Commission.

Principles of Consolidation

The accompanying unaudited condensed consolidated interim financial statements, which are referred herein as the “Financial Statements” include the accounts of Concierge and its wholly owned subsidiaries, Wainwright, Gourmet Foods, Brigadier and Kahnalytics.

Wainwright was acquired during the current quarter (Refer to Note 11). Due to the commonality of ownership and control between the two companies, the transaction has been accounted for as a transaction between entities under common control. As a result, the assets and liabilities of Wainwright have been considered at their carrying amounts.

The accompanying Financial Statements as of December 31, 2016 and June 30, 2016 and for the three and six month periods ending December 31, 2016 and 2015 include the assets, liabilities and the results of operations of Wainwright at carrying amounts as though the transaction and exchange of equity interests has occurred at the beginning of the comparative period.

All significant inter-company transactions and accounts have been eliminated in consolidation.

Use of Estimates

The preparation of the Financial Statements are in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Other Comprehensive Income (Loss) and Foreign Currency

Comprehensive income (loss) is the total of net income (loss) and other comprehensive income (loss). We record foreign currency translation adjustments and transaction gains and losses in accordance with ASC 830-30, Foreign Currency Translation. The accounts of Gourmet Foods use the New Zealand dollar as the functional currency. The accounts of Brigadier use the Canadian dollar as the functional currency. Assets and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the average exchange rate throughout the period. For the periods ended December 31, 2016 and June 30, 2016, other comprehensive loss consisted of unrealized losses on investments and accumulated translation losses as noted above. Accumulated translation loss, classified as an item of accumulated other comprehensive loss in the stockholders’ equity section of the consolidated balance sheet, was $99,702 as of December 31, 2016.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Concierge’s corporate office maintains cash balances at a financial institution headquartered in San Diego, California. Accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per depositor. The corporation’s uninsured cash balance in the United States was $0 at December 31, 2016. The Company’s subsidiary, Wainwright, also maintains cash balances at various high credit quality institutions and from time to time those deposits exceed the FDIC coverage amount of $250,000. As of December 31, 2016 the uninsured amount totaled $5,673,920, though no losses have been realized and none are expected. Cash balances in Canada are maintained at a financial institution in Saskatoon, Saskatchewan by the Company’s subsidiary. Each account is insured up to CD$100,000 by Canada Deposit Insurance Corporation (CDIC). The Company’s subsidiary had an uninsured cash balance in Canada of CD$438,067 (approximately US$325,988) at December 31, 2016. Balances at financial institutions within certain foreign countries, including New Zealand where the Company’s subsidiary maintains cash balances, are not covered by insurance. As of December 31, 2016, the Company’s subsidiary had uninsured deposits related to cash deposits in uninsured accounts maintained within foreign entities of approximately $335,010. The Company has not experienced any losses in such accounts.

Accounts Receivable, Related Parties

Accounts receivable primarily consists of fund management fees receivable from the Wainwright business. Management fees receivable generally consist of one month of management fees which are collected in the month after they are earned.

Management closely monitors receivables and records an allowance for any balances that are determined to be uncollectible. As of December 31, 2016 and June 30, 2016, the Company considered all remaining accounts receivable to be fully collectible.

Major Customers & Suppliers – Concentration of Credit Risk

Concierge, through Kahnalytics as a licensed user of a proprietary software application, is dependent on the continued support of this online platform and the adherence to the license contract terms between Kahnalytics and the foreign-based licensor. Kahnalytics is also largely dependent on its sales channel to continue to expand its dealer network of resellers who, in turn, activate subscribers to the Kahnalytics service. No single customer accounts for a significant percentage of sales or accounts receivable. Hardware sold by Kahnalytics is currently supplied by one source, however in the event this source proves to be inadequate there are other alternative sources of equal or comparable devices as needed by Kahnalytics. During the six-month period ended December 31, 2015 Kahnalytics had just one customer accounting for 100% of its sales. Correspondingly, Kahnalytics had only two suppliers of the hardware it sold with the larger of the suppliers accounting for 92% of the cost of goods sold for the six-month period ended December 31, 2015. Sales of these products were discontinued during the current fiscal year.

8

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Concierge, through Brigadier, is dependent upon its contractual relationship with the alarm monitoring company who purchases the monitoring contracts and provides monitoring services to Brigadier’s customers. In the event this contract is terminated Brigadier would be compelled to find an alternate source of alarm monitoring, or establish such a facility itself. Management believes that the contractual relationship is sustainable, and has been for many years, with alternate solutions available should the need arise. Sales to the two largest customers, which includes contracts and recurring monthly residuals from the monitoring company, totaled 53% of the total revenues for the six months ended December 31, 2016, and accounted for approximately 26% of accounts receivable as of the balance sheet date of December 31, 2016.

Concierge, through Gourmet Foods, has three major customer groups comprising the gross revenues to Gourmet Foods; 1) grocery, 2) gasoline convenience stores, 3) independent retailers. The grocery and food industry is dominated by several large chain operations, which are customers of Gourmet Foods, and there are no long term guarantees that these major customers will continue to purchase products from Gourmet Foods, however the relationships have been in place for sufficient time to give management reasonable confidence in their continuing business. For the six-month period ending and balance sheet date of December 31, 2016, our largest customer in the grocery industry, who operates through a number of independently branded stores, accounted for approximately 18% of our gross sales revenues and 29% of our accounts receivable. The second largest in the grocery industry accounted for approximately 11% of our gross revenues but less than 10% of our accounts receivable. In the gasoline convenience store market we supply two major accounts. The largest is a marketing consortium of gasoline dealers accounting for approximately 42% of our gross sales revenues and 26% of our accounts receivable. The second largest are independent operators accounting for less than 10% of gross sales but approximately 15% of accounts receivable. The third category of independent retailers accounted for the balance of our gross sales revenue however the group is fragmented and no one customer accounts for a significant portion of our revenues.

For the six months ended December 31, 2015 and the balance sheet date of December 31, 2015 our largest customer in the grocery industry accounted for approximately 13% of revenues and 26% of accounts receivable. For the gasoline convenience store sector, the largest customer is a consortium of independent owners who accounted for approximately 45% of revenues and 20% of accounts receivable (though no single member of the consortium accounted for more than 3% of accounts receivable). Independent retail stores accounted for approximately 12% of revenues however no single store accounted for any significant amount of the accounts receivable. The balance of the revenues and accounts receivable were not dominated by any significant single source for the six months ended December 31, 2015. Gourmet Foods is not dependent upon any one major supplier as many alternative sources are available in the local market place should the need arise.

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CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

For our subsidiary, Wainwright, the concentration of risk and the relative reliance on major customers are found within the various funds it manages and the associated accounts receivable as of December 31, 2106 and June 30, 2016 as depicted below.

	December 31, 2016
Fund	Accounts Receivable
USO	$1,256,213	57%
USCI	445,163	20%
UNG	303,354	14%
All Others	197,954	9%
Total	$2,202,684	100%

	June 30, 2016
Fund	Accounts Receivable
USO	$1,245,396	59%
USCI	400,258	19%
UNG	280,431	13%
All Others	198,020	9%
Total	$2,124,105	100%

Reclassifications

For comparative purposes, prior year’s Financial Statements have been reclassified to conform to report classifications of the current year.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. This pronouncement is effective for annualreporting periods beginning after December 15, 2016, and is to be applied using one of two retrospective application methods, with early application not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements.

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CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.  In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company’s consolidated financial statements.

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This update is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not anticipate the adoption of this ASU will have a significant impact on its consolidated financial position, results of operations, or cash flows.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, to mainly change the accounting for investments in equity securities and financial liabilities carried at fair value as well as to modify the presentation and disclosure requirements for financial instruments. The ASU is effective for annual periods beginning after December 15, 2018, with early adoption permitted. Adoption of the ASU is retrospective with a cumulative adjustment to retained earnings or accumulated deficit as of the adoption date. The Company does not anticipate that the adoption of the ASU will have a material impact on its financial statements.

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CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share Based Payment Accounting, to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of this newly issued guidance to its consolidated financial statements.

On November 17, 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. It is intended to reduce diversity in the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. The new standard requires that restricted cash and restricted cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017 including interim periods within those fiscal years. Earlier adoption is permitted. The adoption of ASU 2016-18 is not expected to have a material effect on the Company’s consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Clarifying the Definition of a Business, which clarifies and provides a more robust framework to use in determining when a set of assets and activities is a business. The amendments in this update should be applied prospectively on or after the effective date. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those periods. Early adoption is permitted for acquisition or deconsolidation transactions occurring before the issuance date or effective date and only when the transactions have not been reported in issued or made available for issuance financial statements. The Company does not expect the adoption to have any significant impact on its Consolidated Financial Statements.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods. Early adoption is permitted for interim or annual goodwill impairment test performed on testing dates after January 1, 2017. The Company will apply this guidance to applicable impairment tests after the adoption date.

No other recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements.

12

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 3.

INVENTORY

Inventories consisted of the following:

	December 31, 2016	June 30, 2016
		As Adjusted
Raw materials	$46,711	$50,023
Supplies and packing materials	119,734	77,497
Finished goods	332,366	357,351
	498,811	484,871
Less impairment finished goods	(2,774)	(48,330)
Total	$496,037	$436,541

NOTE 4.

PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31, 2016 and June 30, 2016:

	December 31, 2016	June 30, 2016
		As Adjusted
Plant and Equipment	$1,236,138	$1,477,411
Furniture & Office Equipment	146,076	119,123
Vehicles	82,491	58,850
Total Property and Equipment, Gross	1,464,705	1,655,384
Accumulated Depreciation	(428,660)	(488,691)
Total Property and Equipment, Net	$1,036,045	$1,166,693

Depreciation expense amounted to $139,873 and $96,676 for the six months ended December 31, 2016 and 2015, respectively.

NOTE 5.

GOODWILL

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in business combinations. Goodwill comprised of the following amounts:

	December 31, 2016	June 30, 2016
		As Adjusted
Trained workforce – Gourmet Foods	$51,978	$51,978
Trained workforce - Brigadier	75,795	75,795
Goodwill – Gourmet Foods	45,669	45,669
Goodwill - Brigadier	45,814	45,814
	$219,256	$219,256

 The Company tests for goodwill impairment at each reporting unit. There was no goodwill impairment for the three months ended December 31, 2016.

13

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 6.

INTANGIBLE ASSETS

Intangible assets consisted of the following:

	December 31, 2016	June 30, 2016
		As Adjusted
Brand name	$402,123	$402,123
Domain name	36,913	36,913
Customer relationships	500,252	500,252
Non-compete agreement	84,982	84,982
Recipes	21,601	21,601
Total	1,045,871	1,045,871
Less : Accumulated Amortization	(87,615)	(27,658)
Net Intangibles	$958,256	$1,018,213

CUSTOMER RELATIONSHIP

On August 11, 2015, the Company acquired Gourmet Foods. The fair value on the acquired customer relationships was estimated to be $66,153 and is amortized over the remaining useful life of 10 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired customer relationships was estimated to be $434,098 and is amortized over the remaining useful life of 10 years.

	December 31, 2016	June 30, 2016
		As Adjusted
Customer relationships	$500,252	$500,252
Less: accumulated amortization	(34,877)	(9,659)
Total customer relationships, net	$465,375	$490,593

BRAND NAME

On August 11, 2015, the Company acquired Gourmet Foods. The fair value on the acquired brand name was estimated to be $61,429 and is amortized over the remaining useful life of 10 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired brand name was estimated to be $340,694 and is amortized over the remaining useful life of 10 years.

	December 31, 2016	June 30, 2016
		As Adjustsed
Brand name	$402,123	$402,123
Less: accumulated amortization	(28,719)	(8,447)
Total brand name, net	$373,404	$393,696

14

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

DOMAIN NAME

On August 11, 2015, the Company acquired Gourmet Foods. The fair value on the acquired domain name was estimated to be $21,601 and is amortized over the remaining useful life of 5 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired domain name was estimated to be $15,312 and is amortized over the remaining useful life of 5 years.

	December 31, 2016	June 30, 2016
		As Adjusted
Domain Name	$36,913	$36,913
Less: accumulated amortization	(7,915)	(4,193)
Total brand name, net	$28,998	$32,720

 

RECIPES

On August 11, 2015, the Company acquired Gourmet Foods. The fair value on the recipes was estimated to be $21,601 and is amortized over the remaining useful life of 5 years.

	December 31, 2016	June 30, 2016
		As Adjusted
Recipes	$21,601	$21,601
Less: accumulated amortization	(6,115)	(3,937)
Total Recipes, net	$15,486	$17,664

NON-COMPETE AGREEMENT

On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired non-compete agreement was estimated to be $104,122 and is amortized over the remaining useful life of 5 years.

	December 31, 2016	June 30, 2016
		As Adjusted
Non-compete agreement	$84,982	$84,982
Less: accumulated amortization	(9,989)	(1,421)
Total non-compete agreement, net	$94,993	$83,561

 

AMORTIZATION EXPENSE

The total amortization expense for the six months ended December 31, 2016 was $59,957. No amortization was taken for the comparison period ending December 31, 2015.

Estimated amortization expenses of intangible assets for the next five twelve month periods ending December 31, are as follows:

Years Ending December 31,	Expense
2017	$118,937
2018	$118,937
2019	$118,937
2020	$115,291
2021	$98,536

15

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 7.

OTHER ASSETS

Other Current Assets

Other current assets totaling $1,263,521 as of December 31, 2016 and $755,509 as of June 30, 2016 are comprised of various components as listed below.

	As of December 31,	As of June 31,
	2016	2016
		As Adjusted
Deferred tax asset	$12,727	$19,501
PrePaid expenses	319,868	242,582
PrePaid income tax	930,926	493,427
Notes receivable	150,000	150,000
Total	$1,263,521	$755,509

Investments

Investments are comprised mainly of investments in ETF funds. Wainwright, from time to time, provides initial investments in the creation of ETF funds that Wainwright manages. Wainwright classifies these investments as current assets as these investments are generally sold within one year from the balance sheet date. Investments in which no controlling financial interest or significant influence exists are recorded at fair value with unrealized holding gains and losses included in accumulated other comprehensive income (loss) as a component of stockholders’ equity, except for unrealized losses determined to be other-than-temporary, which are included in the condensed consolidated statements of operations and comprehensive income (loss). Investments in which no controlling financial interest exists, but significant influence exists are recorded as per the Equity Method of Investment. As ofDecember 31, 2016 and June 30, 2016, investments are approximately $0.8 million and $1 thousand, respectively.

Restricted Cash

At December 31, 2016 Gourmet Foods had on deposit NZ$20,000 (approximately US$13,847) securing a lease bond for one of its properties. The cash securing the bond is restricted from access or withdrawal so long as the bond remains in place. There was no bond posted by Gourmet Foods at June 30, 2016, thus the restricted cash amount was zero.

Long Term Assets

Long term assets totaling $1,723,342 and $1,526,154,at December 31, 2016 and June 30, 2016, respectively, were attributed to Wainwright and consisted of

(i)

a $500,980 as of December 31, 2016 and June 30, 2016 representing 10% equity investment in a registered investment adviser accounted for on a cost basis,

(ii)

$1,213,804 as of December 31, 2016 and $1,016,616 as of June 30, 2016 in net deferred tax assets and

(iii)

$8,558 as of December 31, 2016 and June 30, 2016 in other assets.

NOTE 8.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses, included related party payables, consisted of the following:

	December 31, 2016	June 30, 2016
		As Adjusted
Accounts payable	$1,140,125	$1,044,026
Accrued judgment	135,000	135,000
Accrued interest	20,369	5,238
Taxes payable	627,920	769,224
Expense waiver – Funds (related party)	939,385	448,930
Deferred rent	16,943	19,202
Accrued payroll and vacation	580,054	127,271
Accrued expenses	421,258	295,955
Total	$3,881,054	$2,844,847

16

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 9.

RELATED PARTY TRANSACTIONS

Notes Payable - Related Parties

Current related party notes payable consist of the following:

	December 31, 2016	June 30, 2016
		As Adjusted
Notes payable to shareholder, interest rate of 10%, unsecured and payable on July 31, 2004 (past due)	$-	$5,000
Notes payable to shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due)	3,500	3,500
	$3,500	$8,500

 

On July 7, 2016 the Company repaid the outstanding note due to a related party totaling $5,000 in principal and $5,000 in accrued interest. A total of $2,075 in accrued interest was forgiven by the noteholder in settlement of the debt.

Interest expense for all related party notes for the three-month period ending December 31, 2016 and 2015 were $71 and $197 respectively and for the respective six months ended December 31, 2016 and 2015 the interest expense was $141 and $393.

Convertible Promissory Note Payable – Related Parties

On April 8, 2016 the Company entered into a convertible promissory note (the “Promissory Note”) with Gerber Irrevocable Family Trust, an affiliate of our shareholder and CEO, that resulted in the funding of $350,000. The Promissory Note bears interest at four percent (4%) per annum and increases to eight percent (8%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of .01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4 percent annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. The Promissory Note may be prepaid at any time in whole or in part by the Company and is convertible into restricted common stock of the Company at the election of Promissory Note holder on the date which is 180 days following issuance of the Promissory Note at a conversion price of $0.13 per share. The conversion price is subject to adjustment for mergers, consolidations, share exchanges, recapitalizations or similar events. The Promissory Note matures five (5) years from issuance and is unsecured. Proceeds from the Promissory Note are intended to be used for transactions involving acquisitions of unrelated companies by Concierge Technologies that meet the criteria as determined by the Board of Directors. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Note.

17

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On May 25, 2016 the Company entered into a convertible promissory note (the “Promissory Note”) with Schoenberger Family Trust, an affiliate of our shareholder and director, that resulted in the funding of $250,000. The Promissory Note bears interest at four percent (4%) per annum and increases to eight percent (8%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of .01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4 percent annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. The Promissory Note may be prepaid at any time in whole or in part by the Company and is convertible into restricted common stock of the Company at the election of Promissory Note holder on the date which is 180 days following issuance of the Promissory Note at a conversion price of $0.13 per share. The conversion price is subject to adjustment for mergers, consolidations, share exchanges, recapitalizations or similar events. The Promissory Note matures five (5) years from issuance and is unsecured. Proceeds from the Promissory Note are intended to be used for transactions involving acquisitions of unrelated companies by Concierge that meet the criteria as determined by the Board of Directors. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Note.

Interest expense for all related party convertible debentures, for the three months ended December 31, 2016 and 2015 amounted to $2,521 and was $0 respectively.

Wainwright - Related Party Transactions

The Funds managed by USCF and Advisers are deemed by management to be related parties. The Company’s Wainwright revenues, totaled $12,840,475 and $10,941,614 for the six months ended December 31, 2016 and 2015, respectively, were earned from these related parties. Accounts receivable, totaling $2,202,684 and $2,124,105 as of December 31, 2016 and June 30, 2016, respectively, were owed from these related parties. Fund expense waivers, totaling $490,455 and $363,768 for the six months ended December 31, 2016 and 2015, respectively, were incurred on behalf of these related parties. Waivers payable, totaling $939,385 and $448,930 as of December 31, 2016 and June 30, 2016, respectively, were owed to these related parties.

18

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 10.

NOTE PAYABLE

An unsecured loan in the amount of $8,500 due a former director and shareholder who is now deceased has been reclassified as a note due unrelated party. The note is interest free, not deemed assignable to successors by the Company, and held as a contingent liability until resolved.

NOTE 11.

BUSINESS COMBINATIONS

On May 28, 2015, the Company entered into an agreement to acquire the assets of Gourmet Foods, Ltd., a New Zealand corporation, subject to satisfactory completion of due diligence and other customary criteria for a transaction of this kind. Gourmet Foods is a baker of New Zealand meat pies and other confections distributed to major grocery stores, convenience stores, restaurants and other retailers throughout New Zealand. The Company placed a cash deposit with Gourmet Foods in accordance with the provisions of the asset purchase agreement, however the parties later elected to change the nature of the transaction to a stock purchase agreement. The Stock Purchase Agreement (the “SPA”) was entered into on July 28, 2015 and was set to close on July 31, 2015 subject to final adjustments to accounts receivable, accounts payable, inventory, employee entitlements and other current assets and liabilities. The Company paid a purchase consideration of NZ$2,597,535 (approximately US$1,753,428) in cash. An independent evaluation was conducted in order to obtain a fair market value of the fixed assets and intangible assets acquired. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

On August 11, 2015 the parties reached agreement to close the SPA based on the balance sheet information as of July 31, 2015, subject to further adjustments if necessary once certain balances became known without dispute, and the Company remitted the remainder of the purchase price in cash to an account in New Zealand established for the benefit of the shareholders of Gourmet Foods, Ltd. The operations of Gourmet Foods, Ltd. was consolidated going forward with those of the Company as of August 1, 2015.

The following table summarizes the value of the net assets acquired as of the Acquisition Date:

Cash	$50,695
Accounts Receivable	259,662
Prepaid Expenses	11,246
Inventory	256,271
Property and Equipment	1,207,762
Intangible Assets	170,784
Goodwill	97,647
Total Assets	$2,054,067
Accounts Payable	$253,951
Employee Entitlements	46,688
Total Liabilities	$300,639
Consideration Paid for Net Assets	$1,753,428

 

On June 2, 2016 the Company closed a Stock Purchase Agreement transaction which resulted in the acquisition of all the outstanding and issued stock of Brigadier Security Systems, a Canadian corporation located in Saskatoon, Saskatchewan. The total purchase price was CD$2,010,266 (approximately US$1,540,830) in cash, payable in several stages. The consideration of CD$1,000,000 (US$756,859) was paid in cash and CD$733,000 (US$569,935) was deposited in an attorney client trust account in Canadian currency (to be paid to Brigadier, on the 183rd day following the Closing Date if net sales meeting the minimum threshold of $1,500,000 CDN (the "Sales Goal") is achieved. The Sales Goal was achieved and the payment was released on November 23, 2016. The audit of Brigadier resulted in an upwards adjustment of the purchase price by CD$277,266 (US$214,035) which has been recorded as of September 30, 2016 as Purchase Consideration Payable and was subsequently paid in October 2016. Under the acquisition method of accounting, the total purchase consideration is allocated to Brigadier net tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The following table summarizes the value of the net assets acquired as of the Acquisition Date:

Assets
Cash	80,391
Accounts Receivable	431,656
Inventory	238,148
Prepaid Expenses & Other Assets	20,001
Property, plant and equipment	20,455
Intangible Assets	875,087
Goodwill	121,609
Total Assets	1,787,348
Liabilities
Accounts Payable	187,925
Income Tax Payable	55,953
Customer Deposits	2,640
Total Liabilities	246,518
Consideration paid for net assets	1,540,830

19

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On December 9, 2016 the Company closed a Stock Purchase Agreement (the “Purchase Agreement”), by and among the Company and Wainwright and each of the shareholders of Wainwright common stock (the “Wainwright Sellers”), pursuant to which the Wainwright Sellers agreed to sell, and the Company agreed to purchase 1,741 shares of Wainwright common stock, par value $0.01 per share, (the “Wainwright Common Stock”), which represents all of the issued and outstanding Wainwright Common Stock, in exchange for: (i) 818,799,976 shares of Company Common Stock, and (ii) 9,354,119 shares of Company Preferred Stock (which preferred shares are convertible into 187,082,377 shares of Company Common Stock). Wainwright and the Company have a commonality of ownership and control as represented by the shareholdings, either directly or beneficially, of Nicholas Gerber and Scott Schoenberger as a group pursuant to the aforementioned Purchase Agreement and a voting agreement which gives them control of over 50% of Wainwright and over 50% of Concierge both before and after the business combination. Accordingly, the acquisition has been recorded as a transaction between entities under Common Control in the accompanying financial statements . Further, the accompanying financial statements have been adjusted to include the carrying value of assets, liabilities, equity and operations of Wainwright as if the transaction had concluded on July 1, 2015.

The unaudited pro forma financial information below represents the combined results of our operations together with those of Wainwright and as if the Gourmet Foods Limited and Brigadier acquisition had occurred at the beginning of the periods presented. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have occurred if the acquisitions had taken place at the beginning of the period presented, nor is it indicative of future operating results.

	3-mo ended December 31, 2015	6-mo ended December 31, 2015
Revenue	$7,538,894	$14,624,581
Income from Operations	1,780,144	3,847,213
Net Income	$1,009,341	$2,438,998
Net Income per share available to common stockholders, basic and diluted	$0.00	$0.00

 

NOTE 12.

COMMITMENTS AND CONTINGENCIES

Lease Commitments

Gourmet Foods has operating leases for its office, factory and warehouse facilities located in Tauranga, New Zealand, as well as for certain equipment including vehicles. These leases are generally for three-year terms, with options to renew for additional three-year periods. The leases mature between August 2018 and August 2021, and require monthly rental payments of approximately US$10,891 translated to U.S. currency as of December 31, 2016.

Future minimum lease payments for Gourmet Foods are as follows:

Year Ended June 30,	Lease Amount
2017	$65,345
2018	130,690
2019	57,707
2020	17,806
2021	1,487
Total Minimum Lease Commitment	$273,035

20

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Gourmet Foods entered into a General Security Agreement in favor of the Gerald O’Leary Family Trust and registered on the Personal Property Securities Register for a priority sum of NZ$110,000 (approximately US$76,156) to secure the lease of its primary facility. In addition, a NZ$20,000 (approximately US$13,847) bond has been posted through ANZ Bank and secured with a cash deposit of equal amount to secure a separate facilities lease. The General Security Agreement and the cash deposit will remain until such time as the respective leases are satisfactorily terminated in accordance with their terms. Interest from the cash deposit securing the lease accumulates to the benefit of Gourmet Foods and is listed as a component of interest income/expense on the accompanying Consolidated Statements of Operations.

Brigadier leases office and storage facilities in Saskatoon, Saskatchewan as well as vehicles used for installations and service and various office equipment. The minimum lease obligations through their expiry dates are indicated as below and require monthly payments of approximately US$11,455 translated to U.S. currency as of December 31, 2016.

Future minimum lease payments for Brigadier are as follows:

Year Ended June 30,	Lease Amount
2017	$23,524
2018	32,537
2019	29,826
Total Minimum Lease Commitment	$85,887

 

Wainwright leases office space in Oakland, California under an operating lease, which expires in October 2018. Rent expense was $63,994 and $64,648 for the six months ended December 31, 2016 and 2015, respectively.

Future minimum rental payments required under the operating lease, which has remaining non-cancellable lease terms in excess of one year, are as follows:

Year ended June 30,	Lease Amount
2017	$66,002
2018	134,645
2019	45,322
Total minimum lease commitment	$245,969

Litigation

On May 6, 2002, a default judgment was awarded to Brookside Investments Ltd. against, jointly and severally, Concierge, Allen E. Kahn, and The Whitehall Companies in the amount of $135,000 plus legal fees. As of May 7, 2012, the judgment had lapsed due to the passage of time and the creditor’s failure to renew. Although a new court action would be required by the plaintiff in order to seek legal remedies, the Company has accrued the amount of $135,000 in the accompanying financial statements as accrued expenses as of December 31, 2016.

From time to time, the Company is involved in legal proceedings arising mainly from the ordinary course of its business. In management’s opinion, the legal proceedings are not expected to have a material effect on the Company’s financial position or results of operations.

21

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Retirement Plan

Wainwright's wholly owned subsidiary USCF, has a 401(k) Profit Sharing Plan covering its employees who are over 21 years of age and who have completed a minimum of 1,000 hours of service and have worked for USCF for one or more years. Participants may make contributions pursuant to a salary reduction agreement. In addition, USCF makes a safe harbor matching contribution. Annual matching contributions paid totaled approximately $70,000 for each of the six months ended December 31, 2016 and 2015, respectively.

NOTE 13.

INCOME TAXES

The Company accounts for income taxes under the asset and liability method, which recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts, and for net operating losses and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company records a valuation allowance against deferred tax assets when it is more likely than not that such asset will not be realized. The Company continues to monitor the likelihood that it will be able to recover its deferred tax assets. If recovery is not likely, the Company must increase its provision for income taxes by recording a valuation allowance against the deferred tax assets.

The Company accounts for uncertain tax positions in accordance with the authoritative guidance on income taxes under which the Company may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes.

As of December 31, 2016, the Company's total unrecognized tax benefits were approximately $29,000, which would affect the effective tax rate if recognized. The Company will recognize interest and penalties, when they occur, related to uncertain tax provisions as a component of tax expense. There is no interest or penalties to be recognized for the quarter ended December 31, 2016.

The Company is required to make its best estimate of the annual effective tax rate for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis. The Company recorded a tax provision of $1.7 million and $1.4 million from its continuing operations for the six months ended December 31, 2016 and December 31, 2015, respectively. The Company recorded a tax provision of $0.6 million and $0.8 million from its continuing operations for the three months ended December 31, 2016 and December 31, 2015, respectively. The effective tax rate for the six months ended December 31, 2016 and three months ended September 30, 2016 differed from the statutory rate primarily due to the mix of non-deductible meals and entertainment expenses, imputed interest income and decrease in valuation allowance. The effective tax rate could fluctuate in the future due to changes in the taxable income mix between various jurisdictions.

The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company’s tax years 2012 through 2016 will remain open for examination by the federal and state authorities for three and four years, respectively. As of December 31, 2016, there were no active taxing authority examinations.

22

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 14.

SEGMENT REPORTING

With the acquisition of Wainwright Holdings, Gourmet Foods, Ltd. and Brigadier, the Company has identified four segments for its products and services; U.S. investment fund management, U.S. data streaming and hardware, New Zealand and Canada. Our reportable segments are business units located in different global regions. The Company’s operations in the U.S.A. include the gathering of live-streaming video recording data displayed online to subscribers through our wholly owned subsidiary Kahnalytics, Inc. and the income derived from management of various investment funds by our subsidiary Wainwright. In New Zealand operations include the production, packaging and distribution on a commercial scale of gourmet meat pies and related bakery confections through our wholly owned subsidiary Gourmet Foods, Ltd. and in Canada we provide security alarm system installation and monitoring to residential and commercial customers sold through our wholly owned subsidiary Brigadier. Separate management of each segment is required because each business unit is subject to different operational issues and strategies due to their particular regional location. The Company accounts for intra-company sales and expenses as if the sales or expenses were to third parties and eliminates them in the consolidation. Amounts are adjusted for currency translation as of the balance sheet date and presented in US dollars.

The following table presents a summary of identifiable assets as of December 31, 2016 and June 30, 2016:

	As of December 31, 2016	As of June 30, 2016
		As Adjusted
Identifiable assets:
Corporate headquarters	$1,299,226	$1,521,210
U.S.A. : fund management	12,167,931	8,575,810
U.S.A. : data streaming	82,032	87,790
New Zealand	1,916,937	2,199,128
Canada	1,114,617	956,855
Consolidated	$16,580,743	$13,540,793

 

The following table presents a summary of operating information for the three months ended December 31, 2016 and 2015: (note: Canadian interests had not yet been acquired in 2015)

	3-Months Ended December 31, 2016	3-Months Ended December 31, 2015
Revenues from unaffiliated customers:		As Adjusted
U.S.A. : data streaming and hardware	$25,039	$(3,500)
U.S.A. : investment fund management	6,472,531	5,645,696
New Zealand : Food Industry	1,203,521	996,563
Canada : Security alarm monitoring	828,114	-
Consolidated	$8,529,205	$6,638,759
Net income (loss) after taxes:
Corporate headquarters	$(158,990)	$(43,459)
U.S.A. : data streaming and hardware	(16,035)	(4,181)
U.S.A. : investment fund management	1,068,716	966,764
New Zealand : Food Industry	17,154	29,950
Canada : Security alarm monitoring	105,603	-
Consolidated	$1,016,446	$949,074

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CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following table presents a summary of operating information for the six months ended December 31, 2016 and 2015: (note: New Zealand interest were present for only 5 months in 2015 and Canadian interests had not yet been acquired in 2015)

	6-Months Ended December 31, 2016	6-Months Ended December 31, 2015
Revenues from unaffiliated customers:		As Adjusted
U.S.A. : data streaming and hardware	$89,566	$117,700
U.S.A. : investment fund management	12,840,475	10,941,614
New Zealand : Food Industry	2,394,081	1,610,923
Canada : Security alarm monitoring	1,641,660	-
Consolidated	$16,965,782	$12,670,237
Net income (loss) after taxes:
Corporate headquarters	$(337,906)	$(117,161)
U.S.A. : data streaming and hardware	(32,867)	(1,817)
U.S.A. : investment fund management	2,486,232	2,376,828
New Zealand : Food Industry	(7,640)	28,244
Canada : Security alarm monitoring	219,121	-
Consolidated	$2,326,940	$2,286,094

 

The following table presents a summary of capital expenditures for the six months ended December 31:

Capital expenditures:	2016	2015
Corporate headquarters	$-	$863
New Zealand	43,049	109,722
Canada	4,297	-
Consolidated	$47,346	$110,585

NOTE 15.

REVERSE STOCK SPLIT

On November 11, 2015, the Board of Directors (the “Board’) of the Company approved the implementation of a one-for-ten (1:10) reverse stock split of all of the Company’s issued and outstanding common and preferred stock (the “Reverse Stock Split”). The Reverse Stock Split became effective when trading opened on December 15, 2015. The Reverse Stock Split was previously approved by the Company’s shareholders pursuant to a majority written consent and by the Board pursuant to unanimous written consent on February 26, 2015. The approvals provided discretion to the Board to implement the Reverse Stock Split by the end of 2015. The number of the Company’s authorized shares of common stock did not change. All figures have been presented on the basis of reverse split wherever applicable for all the periods presented in these financial statements.

 

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Item 2. 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the condensed financial statements and the accompanying notes thereto and is qualified in its entirety by the foregoing and by more detailed financial information appearing elsewhere in this quarterly report on Form 10-Q. See "Financial Statements."

Forward-Looking Information

This quarterly report on Form 10-Q, including this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding the plans and objectives of management for future operations. This information may involve known and unknown risks, uncertainties and other factors that may cause Concierge Technologies, Inc.’s (“Concierge” or the “Company”) actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe Concierge’s future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project,” the negative of these words, other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and Concierge cannot assure investors that the projections included in these forward-looking statements will come to pass. Concierge’s actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors.

Concierge has based the forward-looking statements included in this quarterly report on Form 10-Q on information available to it on the date of this quarterly report on Form 10-Q, and Concierge assumes no obligation to update any such forward-looking statements. Although Concierge undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, investors are advised to consult any additional disclosures that Concierge may make directly to them or through reports that Concierge in the future files with the U.S. Securities and Exchange Commission (the “SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Some of the information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report includes forward-looking statements based on our current management’s expectations. There can be no assurance that actual results, outcomes or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including, among others, our limited operating history, unpredictability of future operating results, competitive pressures and the other potential risks and uncertainties.

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Introduction

Concierge Technologies, Inc. (“Concierge”) or the (“Company”) conducts business through its wholly-owned operating subsidiaries operating in the U.S., New Zealand and Canada, respectively. The operations of the Company’s wholly-owned subsidiaries are more particularly described herein but are summarized as follows:

●

Kahnalytics, Inc. (“Kahnalytics”), a U.S. based company, captures and presents data from vehicle-mounted camera devices equipped for live-streaming.

●

Gourmet Foods, Ltd. (“GFL”), a New Zealand based company, manufactures and distributes New Zealand meat pies on a commercial scale.

●

Brigadier Security Systems (“Brigadier”), a Canadian based company, sells and installs commercial and residential alarm monitoring systems.

●

Wainwright Holdings Inc. (“Wainwright”), a U.S. based company, manages investment funds primarily in the commodities and futures financial markets.

Results of Operations

Kahnalytics

The six months ended December 31, 2016 involved a different business model than that of the corresponding period in 2015. By obtaining an exclusive software license and partnering with a camera importer/distributor as a channel-to-market, Kahnalytics began the business of hosting a web-based server that subscribers could access to view their camera video files, vehicle location, speed and event triggers in real time. To facilitate the sales process and entice customers to the online subscription service, Kahnalytics implemented a hardware subsidy program and offered a wireless data plan that was resold to subscribers of the service, called the Kahnalytics Fleet Management Service or “FMS”. Two types of services were offered, 1) a FMS basic subscription plan where subscribers provided their own wireless connection to the FMS and 2) a FMS data plan where subscribers were provided hardware needed to connect wirelessly to the Internet and also charged a monthly fee for the air time usage. Kahnalytics also charged a subsidized price of $50 per each wireless hardware device used in creating the wireless connection. Kahnalytics purchases data plans from a network reseller and, in turn, resells that plan to its subscribers.

During the six months ended December 31, 2015, Kahnalytics purchased cameras, various other hardware items, and installation services for sale to specific insurance companies, and ultimately for installation into insured’s vehicles. The hardware items were either listed in inventory if held beyond the close of the current accounting period, or summarized as “cost of goods sold” when sold. Inventory orders which had been paid for, or partially paid for, in advance of receipt are classified as “Advance to Suppliers.” Generally, hardware is sold to customers who require delivery and installation of the product in their vehicles. The charges for services such as these are included in the bundled, installed, sales price reflected on sales invoices and accounts receivable.

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Due to these differences in the business model of Kahnalytics, the comparative results below will not be a true representation of Kahnalytics operating trends.

For the Three Months Ended December 31, 2016 Compared to the Three Months Ended December 31, 2015

For the three months ended December 31, 2016 sales of FMS basic subscriptions were $2,667 and FMS data plans were $20,685. There were no FMS related subscription sales for the three months ended December 31, 2015. Hardware sales of wireless connection devices for the three months ended December 31, 2016 were $1,688 as compared to $0 for the three months ended December 31, 2015. Other income for the three months ended December 31, 2016 was $7 for reimbursed shipping charges as compared to $81 for the three months ended December 31, 2015 as an adjustment to sales tax liability.

Net loss for the three months ended December 31, 2016 after income tax of $800 and a downward revaluation to inventory as a result of selling subsidies of $2,774 was $16,036 as compared to a net loss for the three months ended December 31, 2015 of $4,181 after income tax provision of $800.

No sales were recorded for the three-month period ended December 31, 2015, apart from a refund of $3,500. Total revenues (including other income) for the three month periods ended December 31, 2016 and 2015 were $25,046 and ($3,419) respectively.

For the Six Months Ended December 31, 2016 Compared to the Six Months Ended December 31, 2015

For the six months ended December 31, 2016 sales of FMS basic subscriptions were $4,825 and FMS data plans were $31,980. There were no FMS related subscription sales for the six months ended December 31, 2015. Hardware sales of wireless connection devices for the six months ended December 31, 2016 were $10,637 as compared to $0 for the three months ended December 31, 2015. Other income for the six months ended December 31, 2016 was $7 for reimbursed shipping charges as compared to $81 for the three months ended December 31, 2015 as an adjustment to sales tax liability. Obsolete camera inventory was also liquidated during the six months ended December 31, 2016 for a total of $42,124. Total revenues (including other income) for the six month periods ended December 31, 2016 and 2015 were $89,573 and $117,781 respectively.

Net loss for the six months ended December 31, 2016 after income tax of $800 and a downward revaluation to inventory as a result of selling subsidies of $2,774 was $32,867, as compared to a net loss for the six months ended December 31, 2015 of $1,817 after income tax provision of $800.

Accounts receivable as of December 31, 2016 were $43,805 as compared to $2,640 as of June 30, 2016. The difference is attributed to the sale of discontinued hardware at a discount to a distributor on a deferred payment plan rather than any significant change in the aging of accounts receivable.

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Gourmet Foods, Ltd.

Gourmet Foods Limited (“GFL”), was organized in its current form in 2005 (previously known as Pats Pantry Ltd). Pats Pantry was founded in 1966 to produce and sell wholesale bakery products, meat pies and patisserie cakes and slices, in New Zealand. Gourmet Foods, located in Tauranga, New Zealand, sells substantially all of its goods to supermarkets and service station chains with stores located throughout New Zealand. Gourmet Foods also has a large number of smaller independent lunch bars, cafes and corner dairies among the customer list, however they comprise a relatively insignificant dollar volume in comparison to the primary accounts of large distributors and retailers. Concierge purchased all of the issued and outstanding shares of Gourmet Foods as of August 1, 2015 even though the transaction did not officially close until August 11, 2015.

The accompanying financial statements include the operations of Gourmet Foods for the period August 1, 2015 through December 31, 2015 as compared to the operations for the period July 1, 2016 through December 31, 2016. Due to these differences in the accounting periods, the comparative results below will not be a true representation of GFL’s operating trends.

Gourmet Foods operates exclusively in New Zealand and thus the New Zealand dollar is its functional currency. In order to consolidate Concierge’s reporting currency, the US dollar, with that of Gourmet Foods, Concierge records foreign currency translation adjustments and transaction gains and losses in accordance with SFAS 52, Foreign Currency Translation. The translation of New Zealand currency into U.S. dollars is performed for balance sheet accounts using the exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. Gains and losses resulting from the foreign currency translations are included in Accumulated Other Comprehensive Expense found on the Condensed Consolidated Balance Sheets.

For the Three Months Ended December 31, 2016 Compared to the Three Months Ended December 31, 2015

Net revenues for the three months ended December 31, 2016 were $1,203,521 with cost of goods sold of $839,571, resulting in a gross profit of $363,950 for an approximate 30% gross margin as compared to net revenues for the three months ended December 31, 2015 of $996,564 with a cost of goods sold for the three months ended December 31, 2015 of $683,345 producing a 31% gross profit of $313,219.

General and administrative expenses for the three months ended December 31, 2016 were $117,272 plus depreciation expense of $69,872, marketing expense $96,847, wages $56,840 and interest income of $378 producing a pre-tax net income of $23,498 as compared to a pre-tax net income of $41,598 for the three months ended December 31, 2015. General and administrative expenses for the three months ended December 31, 2015 were $145,862, marketing expense $2,530, wages $66,702, and depreciation was $58,450 which produced an operating income of $39,675 before interest income of $1,183, other income of $740 and income tax provision of $11,647.

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Overall, profit margins for the comparative periods are consistent and differences are attributed to depreciation expense, varying income tax provisions and the strengthening of the U.S. dollar against New Zealand currency during the current period.

For the Six Months Ended December 31, 2016 Compared to the Five Months Ended December 31, 2015

Net revenues for the six months ended December 31, 2016 were $2,394,081 with cost of goods sold of $1,646,370 resulting in a gross profit of $747,711 as compared to the five months ended December 31, 2015 where net revenues were $1,610,923; cost of goods sold were $1,134,086; and gross profit was $476,837.

General and administrative expenses for the six months ended December 31, 2016 and 2015 were $355,988 and $253,608, respectively, plus marketing expenses of $107,101 compared to $2,702, and wages of $162,388 compared to $86,396 producing operating incomes of $122,234 and $134,130, respectively, or approximately 5% net operating profit for six months ended December 31, 2016 as compared to 8% for the five months ended December 31, 2015.

The depreciation expense, income tax provision and other income totaled $129,873 for the six months ended December 31, 2016 as a compared to $105,410 for the five months ended December 31, 2015, resulting in a net loss of $7,640 as compared to a net income of $28,721, respectively.

Accounts receivable as of December 31, 2016 were $301,002 as compared to $285,673 at June 30, 2016.

Overall, profit margins for the comparative periods are consistent and differences are attributed to depreciation expense, varying income tax provisions and the strengthening of the US dollar against New Zealand currency during the current period.

Brigadier Security Systems

Brigadier Security Systems (“Brigadier”) was founded in 1985 and through internal growth and acquisitions the core business of Brigadier began in 1998. Today Brigadier is one of the largest SecurTek dealers in Saskatchewan with offices in both major urban areas of Regina (under the fictitious business name of “Elite Security”) and Saskatoon. Brigadier is also a Honeywell Certified Access Control Distributor, Kantech Global Dealer and UTC Interlogix Security Pro dealer and the largest independent security contractor in the province. Brigadier provides comprehensive security solutions including access control, camera monitoring, motion detection, and intrusion alarms to home and business owners as well as government offices, schools and public buildings. Brigadier typically sells hardware to customers and a full-time monitoring of the premises. The contract for monitoring the premise is then conveyed to a third-party telecom in exchange for an upfront payment and recurring residuals based on subscriber contracts.

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The accompanying Condensed Consolidated Statements of Operations include the operations of Brigadier only for the three and six months ended December 31, 2016 because Concierge did not acquire Brigadier until June 2, 2016, and thus there is no comparison data to be supplied for the three and six months ended December 31, 2015.

Brigadier operates exclusively in Canada and thus the Canadian dollar is its functional currency. In order to consolidate Concierge’s reporting currency, the US dollar, with that of Brigadier, Concierge records foreign currency translation adjustments and transaction gains and losses in accordance with SFAS 52, Foreign Currency Translation. The translation of Canadian currency into U.S. dollars is performed for balance sheet accounts using the exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. Gains and losses resulting from the foreign currency translations are included in Accumulated Other Comprehensive Expense found on the Condensed Consolidated Balance Sheets.

Brigadier purchases various component parts and accessories anticipated to be required in near-term installations of systems pursuant to sales forecasts. These parts are listed in inventory until sold, which is determined by a sales contract, delivery of the product, and a reasonable expectation of payment under typical terms of sale are in evidence. Inventories are valued at the lower of cost (determined on a FIFO basis) or market. Inventories include product cost, inbound freight and warehousing costs. Concierge compares the cost of inventories with the market value and an allowance is made for writing down the inventories to their market value, if lower.

For the Three Months Ended December 31, 2016

Net sales for the three months ended December 31, 2016 were $827,910 with cost of goods sold recorded as $201,000, resulting in a gross profit of $626,910 with a gross margin of approximately 76%.

General and administrative expenses for the three months ended December 31, 2016 were $104,026 plus marketing expense $44,252 and wages $335,457 providing net operating income before income tax provision, depreciation and other income and expense of $143,173 or approximately 17%.

The depreciation expense for Brigadier for the three months ended December 31, 2016 was $1,262; income tax provision at December 31, 2016 was $38,393; interest income was $31; commission income was $204; and gain on disposal of fixed assets was $1,849 resulting in a net profit of $105,603.

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For the Six Months Ended December 31, 2016

The net sales for the six months ended December 31, 2016 were $1,641,224 with cost of goods sold recorded as $431,572, resulting in a gross profit of $1,209,651 with a gross margin of approximately 74%.

General and administrative expenses for the six months ended December 31, 2016 were $902,409 plus marketing expense $50,547 and wages $662,234 providing net operating income before tax provision, depreciation and other income and expense of $307,242 or approximately 19%.

The depreciation expense for Brigadier for the six months ended December 31, 2016 was $2,386; income tax provision for the six months ended December 31, 2016 at $80,379; interest expense was $279; commission income was $436; and loss on disposal of fixed assets was $6,220, resulting in a net profit of $219,121.

Accounts receivable at December 31, 2016 were $404,616 as compared to $550,907 at June 30, 2016.

Wainwright Holdings

Wainwright was founded in March 2004 as a Delaware corporation with one subsidiary, Ameristock Corporation, which was an investment adviser to Ameristock Mutual Fund, Inc., a registered 1940 Act large cap value equity fund. In January 2010, Ameristock Corporation was spun off as a standalone company. In May 2005, United States Commodity Funds, LLC (“USCF”), a wholly-owned subsidiary of Wainwright, was formed as a single member limited liability company in the State of Delaware. USCF is a registered commodity pool operator with the Commodity Futures Trading Commission (“CFTC”) and a member of the National Futures Association (“NFA”) and serves as the General Partner (“General Partner”) for various limited partnerships (“LP”) as noted below. In June 2013, USCF Advisers, LLC (“Advisers”), a wholly-owned subsidiary of Wainwright, was formed as a Delaware limited liability company and in July 2014, was registered as an investment adviser under the Investment Advisers Act of 1940, as amended. In November 2013, the Advisers board of managers formed USCF ETF Trust (“ETF Trust”) as an open-end management investment company registered under the Investment Company Act of 1940, as amended ('the 1940 Act"). In October 2016, the Advisers board of managers formed USCF Mutual Funds Trust as an open-end management investment company registered under the 1940 Act. Wainwright and subsidiaries USCF and Advisers are collectively referred to as the “Wainwright” hereafter.

Wainwright’s operating activities consist primarily of providing management and investment advisory services to eleven public LP funds and two exchange-traded funds (“ETF’s”).

USCF is currently the General Partner in the following Securities Act of 1933 LP commodity based index funds and Sponsor (“Sponsor”) for the fund series within the United States Commodity Index Funds Trust (“USCIF Trust”):

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USCF as General Partner for the following Funds
United States Oil Fund, LP (“USO”)	Organized as a Delaware limited partnership in May 2005
United States Natural Gas Fund, LP (“UNG”)	Organized as a Delaware limited partnership in November 2006
United States Gasoline Fund, LP (“UGA”)	Organized as a Delaware limited partnership in April 2007
United States Diesel Heating Oil Fund, LP (“UHN”)	Organized as a Delaware limited partnership in April 2007
United States 12 Month Oil Fund, LP (“USL”)	Organized as a Delaware limited partnership in June 2007
United States 12 Month Natural Gas Fund, LP (“UNL”)	Organized as a Delaware limited partnership in June 2007
United States Short Oil Fund, LP (“DNO”)	Organized as a Delaware limited partnership in June 2008
United States Brent Oil Fund, LP (“BNO”)	Organized as a Delaware limited partnership in September 2009
USCF as fund Sponsor - each a series within the USCIF Trust
United States Commodity Index Funds Trust (“USCI Trust”)	A series trust formed in Delaware December 2009
United States Commodity Index Fund (“USCI”)	A commodity pool formed in April 2010 and made public August 2010
United States Copper Index Fund (“CPER”)	A commodity pool formed in November 2010 and made public November 2011
United States Agriculture Index Fund (“USAG”)	A commodity pool formed in November 2010 and made public April 2012
United States Metal Index Fund (“USMI”)	A commodity pool formed in November 2010, and made public June 2012, ceased trading and liquidated March 2015
USCF Canadian Crude Oil Index Fund (“UCCO”)	UCCO is currently in registration and has not yet commenced operations.

In addition, USCF is the sponsor of the USCF Funds Trust, a Delaware statutory trust, and each of its series, the REX S&P MLP Fund, the REX S&P MLP Inverse Fund, the United States 3X Oil Fund and the United States 3X Short Oil Fund, all of which are funds that are currently in registration and have not commenced operations. 

Advisers serves as the investment adviser to the fund(s) within the ETF Trust and has overall responsibility for the general management and administration of the ETF Trust. Pursuant to the current Investment Advisory Agreement, Advisers provides an investment program for the ETF Trust fund(s) and manages the investment of the assets.

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Advisers as fund manager for each series within the ETF Trust
Equity ETF Trust (“ETF Trust”)	Organized as a Delaware statutory trust in November 2013
Stock Split Index Fund (“TOFR”)	Fund launched September 2014
Restaurant Leaders Index Fund (“MENU”)	Fund launched November 2016

All USCF funds and ETF Trust or Advisers funds are collectively referred to as the “Funds” hereafter.

For the Three Months Ended December 31, 2016, Compared to the Three Months Ended December 31, 2015

Wainwright’s revenue and expenses are primarily driven by the amount of Fund assets under management (“AUM”). Wainwright earns monthly management and advisory fees based on agreements with each Fund as determined by the contractual basis point management fee structure in each agreement multiplied by the average AUM over the given period. Many of the company’s expenses are dependent upon the amount of AUM. These variable expenses include Fund administration, custody, accounting, transfer agency, marketing and distribution, and sub-adviser fees and are primarily determined by multiplying contractual fee rates by AUM.

Average AUM for the three months ended December 31, 2016 increased to $4.849 billion, or 13.7%, from the three month average of $4.265 billion for the three months ended December 31, 2015. As a result of increased AUM revenues increased 14.6%, or $0.827 million, to $6.473 million from $5.646 million over the respective three month period.

Wainwright’s total operating expenses for three months ended December 31, 2016 increased $0.932 million to $4.862 million, or 23.7%, from $3.930 million for the three months ended December 31, 2015. Variable expenses, as described above, increased $0.273 million over the respective three month period as a result of increased AUM. Wainwright also incurred one-time professional fees of $0.231 million during the current quarter as part of the acquisition by Concierge. Other expense increases for the three months ended December 31, 2016 as compared to the three months ended December 31, 2015 included increases in employee headcount compared to the prior year, $0.100 million increase in marketing spend and $0.145 million in other professional service and general and administrative expenses.

Net income before taxes for the three months ended December 31, 2106 decreased $0.108 million to $1.611 million from $1.719 million for the three months ended December 31, 2015. The decrease was primarily due to one-time acquisition expenses and an increase in employee headcount from filling two previously open positions and hiring for two new positions.

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For the Six Months Ended December 31, 2016, Compared to the Six Months Ended December 31, 2015

Average AUM for the six months ended December 31, 2016 increased to $4.804 billion, or 17.4%, from the six month average of $4.093 billion for the six months ended December 31, 2015. As a result of increased AUM revenues increased 17.4%, or $1.899 million, to $12.841 million from $10.942 million over the respective six month period.

Wainwright’s total operating expenses for six months ended December 31, 2016 increased $1.570 million to $8.785 million, or 21.8%, from $7.215 million for the six months ended December 31, 2015. Variable expenses, as described above, increased $0.716 million over the respective six month period as a result of increased AUM. Wainwright also incurred one-time professional fees of $0.231 million during the six month ended December 31, 2016 as part of the acquisition by Concierge. Other expense increases for the six months ended December 31, 2016 as compared to the six months ended December 31, 2015 included increases in new fund startup costs of $0.195 million compared to the prior year, $0.159 million increase in marketing spend, an increase of $0.127 million in Fund expense waiver reimbursements based on contractual expense thresholds for certain funds, and $0.142 million in other professional service and general and administrative expenses.

Net income before taxes for the six months ended December 31, 2106 increased $0.325 million to $4.056 million from $3.731 million for six months ended December 31, 2015 due to increases in AUM partially offset by one-time acquisition expenses.

Concierge Technologies and Subsidiaries

With the acquisition of Wainwright, where Wainwright and Concierge have a commonality of ownership and control as represented by the shareholdings, the acquisition has been recorded as a transaction between entities under Common Control on the Condensed Consolidated Balance Sheets of the Company. Further, the Condensed Consolidated Statements of Operations and Comprehensive Income have been adjusted to include the carrying value of operations of Wainwright as if the transaction had concluded on July 1, 2015.

For the Three Months Ended December 31, 2016 Compared to the Three Months Ended December 31, 2015

Concierge incurred an operating income (before provisions for income taxes, other income and expenses, and other comprehensive gains/losses) for the three months ended December 31, 2016 of $1,606,559 as compared to an operating income of $1,707,299 for the three months ended December 31, 2015 of $1,707,299. This represents a decrease in operating income of $100,740 over the three months ended December 31, 2016 when compared to the three months ended December 31, 2015.

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Other income and (expenses) for the three months ended December 31, 2016 and 2015 were ($3,075) and $6,116, where the expense realized in 2016 was primarily a result of interest accruing on outstanding loan balances that did not exist for the same period in 2015. Income tax provisions for the three months ended December 31, 2016 and 2015 were $587,038 and $764,340, respectively, resulting in a net income of $1,016,446 and $949,074, respectively. After giving consideration to currency translation gain of $4,714, the comprehensive income for the three months ended December 31, 2016 was $1,021,161 as compared to the three months ended December 31, 2015, where currency translation gain of $69,847 resulted in a comprehensive income of $1,018,921.

Overall, the net income, before currency translation gains and losses, between the three months ended December 31, 2016 as compared to the three months ended December 31, 2015 increased by $67,372 or approximately 7%. Contributing to the difference in net income between the comparison periods is the absence of Brigadier Security Systems and their contributing revenues for the entirety of the 2015 period and, reducing the increase in profits, are the one-time transaction costs to acquire the aforementioned subsidiaries plus the transaction cost to acquire Wainwright during the current period.

For the Six Months Ended December 31, 2016 Compared to the Six Months Ended December 31, 2015

Concierge incurred an operating income (before provisions for income taxes, other income and expenses, and other comprehensive gains/losses) for the six months ended December 31, 2016 of $3,982,862 as compared to an operating income of $3,643,763 for the six months ended December 31, 2015. This represents an increase in operating income of $339,099 over the six months ended December 31, 2016 when compared to the six months ended December 31, 2015, or approximately 9%.

Other income for the six months ended December 31, 2016 and 2015 were $1,127 and $7,689, where the interest expense recorded in 2016 was primarily a result of accruing interest on outstanding loan balances that did not exist for the same period in 2015. Income tax provisions for the six months ended December 31, 2016 and 2015 were $1,657,049 and $1,365,368, respectively, resulting in a net income of $2,326,940 and $2,286,094, respectively. After giving consideration to currency translation loss of $92,581 the comprehensive income for the six months ended December 31, 2016 was $2,234,359 as compared to the six months ended December 31, 2015 where the currency translation loss was $16,357 and the comprehensive income was $2,269,737. Comprehensive loss is comprised of fluctuations in foreign currency exchange rates and effects the valuation of our holdings in New Zealand and Canada as a result.

Overall, the net income, before currency translation gains and losses, between the six months ended December 31, 2016 as compared to the six months ended December 31, 2015 increased by $40,846 or approximately 1.7%. Contributing to the difference in net income are (i) the presence of our subsidiary Gourmet Foods for only five months of the 2015 period and (ii) the absence of Brigadier Security Systems for the entirety of the 2015 period. Reducing the increase in profits for the six months ended December 31, 2016 are the one-time transaction costs to acquire the aforementioned subsidiaries plus the transaction cost to acquire Wainwright during the six months ended December 31, 2016.

35

Liquidity

During the previous 12 months Concierge has invested approximately $3.5 million in cash towards purchasing and assimilating Gourmet Foods and Brigadier Security Systems into the Concierge Technologies group of companies. Concierge also acquired Wainwright, which provides a significant revenue stream and value. Concierge continues to pursue alternative business strategies with Kahnalytics and intends to grow that opportunity as the situation develops while limiting its capital expenditures. Management forecasts Wainwright, Gourmet Foods and Brigadier to all produce a profit during the current fiscal year and the realization of those profits by Concierge is not expected to be significantly impacted by foreign currency fluctuations against the U.S. dollar during the current fiscal year. While Concierge intends to maintain and improve its revenue stream from wholly owned subsidiaries, Concierge continues to pursue acquisitions of other profitable companies which meet its target profile. Management believes these acquisitions can be completed with available cash resources with no further equity dilution or debt instruments. Provided Concierge’s subsidiaries continue to operate as they are presently, and are projected to operate, Concierge has sufficient capital to pay its general and administrative expenses for the coming fiscal year and to adequately pursue its long term business objectives.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk.

Concierge is a smaller reporting company and is not required to provide the information required by this item.

Item 4.    Controls and Procedures

Disclosure Controls and Procedures

Concierge maintains disclosure controls and procedures that are designed to provide reasonable assurances that the information required to be disclosed in Concierge’s periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms.

The duly appointed officers of Concierge, including its chief executive officer and chief financial officer, who perform functions equivalent to those of a principal executive officer and principal financial officer of Concierge if Concierge had any officers, have evaluated the effectiveness of Concierge’s disclosure controls and procedures and have concluded that the disclosure controls and procedures of Concierge  have been effective as of the end of the period covered by this quarterly report on Form 10-Q.

36

Change in Internal Control Over Financial Reporting

There were no significant changes in the Company's internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1.                                 

Legal Proceedings

None.

Item 1A. 

Risk Factors.

Concierge is a smaller reporting company and is not required to provide the information required by this item.

Item 2. 

Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3.                                 

Defaults Upon Senior Securities.

None.

Item 4.                                 

Mine Safety Disclosures.

Not applicable.

Item 5.                                 

Other Information

On September 19, 2016, Concierge Technologies, Inc. (“Concierge” or the “Company”) entered into a conditional Stock Purchase Agreement (the “Agreement”), dated September 19, 2016, with Wainwright Holdings, Inc., a Delaware corporation (“Wainwright”) and certain shareholders of Wainwright (the “Sellers”), pursuant to which the Sellers conditionally agreed to sell, and the Company conditionally agreed to purchase, shares representing approximately 97% of the total issued and outstanding common stock of Wainwright (the “Wainwright Shares”). The Company subsequently, on December 8, 2016, obtained the joiner agreements to include the entirety of the Wainwright shareholders as Sellers. As a result of the transaction, all shareholders of Wainwright have become shareholders of the Company.

Prior to the transaction Mr. Gerber, along with certain family members and certain other Wainwright shareholders, owned the majority of the voting stock in the Company as well as Wainwright. Following the closing of this transaction, he and those shareholders continue to own the majority of the Company voting shares.

37

Wainwright owns all of the issued and outstanding limited liability company membership interests of United States Commodity Funds LLC, a Delaware limited liability company (“USCF”) and USCF Advisers, LLC (“USCF Advisers”). USCF is a commodity pool operator registered with the Commodity Futures Trading Commission. USCF Advisers is an SEC registered investment adviser. USCF and USCF Advisers act as the advisers to the Funds set forth in the Agreement (each, a “Fund”, and collectively, the “Funds”).

The Closing of the transaction occurred on December 9, 2016 with the issuance of 818,799,976 shares of our common stock and 9,354,119 shares of our Series B Voting, Convertible, Preferred stock in exchange for all the outstanding and issued shares held by the Wainwright Shareholders.

The details to the acquisition of Wainwright Holdings are more particularly described in the Form 8K submitted on December 12, 2016 and incorporated herein by this reference.

Item 6.                                 

Exhibits

The following exhibits are filed, by incorporation and by reference, as part of this Form 10-Q:

Exhibit Number	Description of Document
2	Stock Purchase Agreement of March 6, 2000 between Starfest, Inc. and MAS Capital, Inc.*
2	Stock Purchase Agreement among Concierge Technologies, Inc., Wireless Village, Inc., Bill Robb and Daniel Britt.++
3.1	Certificate of Amendment of Articles of Incorporation of Starfest, Inc. and its earlier articles of incorporation.*
3.2	Bylaws of Concierge, Inc., which became the Bylaws of Concierge Technologies upon its merger with Starfest, Inc. on March 20, 2002.*
3.5	Articles of Merger of Starfest, Inc. and Concierge, Inc. filed with the Secretary of State of Nevada on March 1, 2002.**
3.6	Agreement of Merger between Starfest, Inc. and Concierge, Inc. filed with the Secretary of State of California on March 20, 2002.**
3.7	Articles of Incorporation of Concierge Technologies, Inc. filed with the Secretary of State of Nevada on April 20, 2005.+
3.8	Articles of Merger between Concierge Technologies, Inc., a California corporation, and Concierge Technologies, Inc., a Nevada corporation, filed with the Secretary of State of Nevada on March 2, 2006 and the Secretary of State of California on October 5, 2006.+
3.9	Certificate of Designation (Series of Preferred Stock) filed with the Secretary of State of Nevada on September 23, 2010.
3.10	Certificate of Amendment of Articles of Incorporation (increasing authorized stock) filed with the Secretary of State of Nevada on December 20, 2010.
10.1	Agreement of Merger between Starfest, Inc. and Concierge, Inc.*
10.2	Securities Purchase Agreement, dated January 26, 2015, by and among Concierge Technologies, Inc. and Purchasers. ****
10.3	Registration Rights Agreement, dated January 26, 2015, by and among Concierge Technologies, Inc. and Purchasers. ****
10.4	Consulting Agreement, dated January 26, 2015, by and between Concierge Technologies, Inc. and David Neibert. ****

38

10.5	Stock Redemption Agreement, dated February 26, 2015, by and among Concierge Technologies, Inc. the Shareholders and Janus Cam. ..**(**
10.6	Distribution Agreement, dated March 4, 2015, by and between Concierge Technologies, Inc. and Janus Cam. *****
10.7	Convertible Promissory Note by and between Wainwright Holdings, Inc. and Concierge Technologies, Inc. dated January 27, 2016. ******
10.8	Stock Purchase Agreement, dated May 27, 2016, by and among Concierge Technologies, Inc., Brigadier Security Systems (2000) Ltd., and the shareholders of Brigadier Security Systems (2000) Ltd. *******
10.9	Stock Purchase Agreement By and Among Concierge Technologies, Inc., Wainwright Holdings, Inc. and Each of the Individuals and Entities Executing Signature Pages Attached Thereto*********
14	Code of Ethics for CEO and Senior Financial Officers. ***
31.1(1)	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2(1)	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1(1)	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2(1)	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1) 

Filed herewith.

*Previously filed with Form 8-K12G3 on March 10, 2000; Commission File No. 000-29913, incorporated herein.

**Previously filed with Form 8-K on April 2, 2002; Commission File No. 000-29913, incorporated herein.

***Previously filed with Form 10-KSB on October 20, 2004; Commission File No. 000-29913, incorporated herein.

+Previously filed with Form 10-KSB FYE 06-30-06 on October 20, 2006; Commission File No. 000-29913, incorporated herein.

++ Previously filed on November 5, 2007 as Exhibit 10.2 to Concierge Technologies’ Form 8-K for 10-30-07; Commission File No. 000-29913, incorporated herein.

****Previously filed with Current Report on Form 8-K on January 29, 2015 and incorporated by reference herein.

***** Previously filed with Current Report on Form 8-K on March 4, 2015 and incorporated by reference herein.

****** Previously filed with Current Report on Form 8-K on February 2, 2016 and incorporated by reference herein.

******* Previously filed with Current Report on Form 8-K on June 8, 2016 and incorporated by reference herein.

******** Previously filed with Current Report on Form 8-K on September 19, 2016 and incorporated by reference herein.

********* Previously filed with Current Report on Form 8-K on December 12, 2016 and incorporated by reference herein.

39

SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CONCIERGE TECHNOLOGIES, INC.
Dated: February 21, 2017	By:	/s/ Nicholas Gerber
		Nicholas Gerber
		Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Concierge Technologies, Inc. and will be retained by Concierge Technologies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

  40

EX-31.1

EXHIBIT 31.1

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

I, Nicholas Gerber, certify that:

1.           

I have reviewed this report on Form 10-Q of the Concierge Technologies, Inc.;

2.           

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)           

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 21, 2017	By:	/s/ Nicholas Gerber
		Nicholas Gerber
		Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

I, David W. Neibert, certify that:

1.           

I have reviewed this report on Form 10-Q of the Concierge Technologies, Inc.;

2.           

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)           

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 21, 2017	By:	/s/ David W. Neibert
		David W. Neibert
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Concierge Technologies, Inc. (the “Company”) on Form 10-Q for the quarter ended December 31, 2016, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, Nicholas Gerber, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)           

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)           Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 21, 2017	By:	/s/ Nicholas Gerber
		Nicholas Gerber
		Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Concierge Technologies, Inc. and will be retained by Concierge Technologies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Concierge Technologies, Inc. (the “Company”) on Form 10-Q for the quarter ended December 31, 2016, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, David W. Neibert, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)           

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)           Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 21, 2017	By:	/s/ David W. Neibert
		David W. Neibert
		Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Concierge Technologies, Inc. and will be retained by Concierge Technologies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2016	Feb. 10, 2017
RelatedPartyNotesPayableCurrent9
Entity Registrant Name	CONCIERGE TECHNOLOGIES INC
Entity Central Index Key	0001005101
Document Type	10-Q
Document Period End Date	Dec. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		886,753,847
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2017

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	Dec. 31, 2016	Jun. 30, 2016
CURRENT ASSETS:
Cash & cash equivalents	$ 7,080,786
Accounts receivable, net	749,423
Accounts receivable, related parties	2,202,684
Inventory, net	496,037
Investments	837,546
Other current assets	1,263,521
Total current assets	12,629,997
Restricted cash	13,847
Property and equipment, net	1,036,045
Goodwill	219,256
Intangible assets - net	958,256
Long term assets	1,723,342
Total assets	16,580,743
CURRENT LIABILITIES:
Accounts payable and accrued expenses	2,941,669
Accounts payable, related parties	939,385
Purchase consideration payable	0
Notes payable - related parties	3,500
Notes payable	8,500
Convertible Promissory Note payable - related parties, net	600,000
Total liabilities	4,493,054
Commitments & Contingencies
Convertible Preferred stock, 50,000,000 authorized par $0.001 Series B: 13,108,474 issued and outstanding at December 31, 2016 and June 30, 2016	13,108
Total commitments and contingencies	13,108
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value; 900,000,000 shares authorized; 886,753,846 shares issued and outstanding at December 31, 2016 and at June 30, 2016	886,754
Additional paid-in capital	9,058,605
Accumulated other comprehensive income (loss)	(99,702)
Retained Earnings (Accumulated Deficit)	2,228,923
Total Stockholders' equity	12,074,580
Total liabilities and Stockholders' equity	$ 16,580,743
As Adjusted
CURRENT ASSETS:
Cash & cash equivalents		$ 5,454,107
Accounts receivable, net		839,220
Accounts receivable, related parties		2,124,105
Inventory, net		436,541
Investments		993
Other current assets		755,509
Total current assets		9,610,477
Restricted cash		0
Property and equipment, net		1,166,693
Goodwill		219,256
Intangible assets - net		1,018,213
Long term assets		1,526,154
Total assets		13,540,793
CURRENT LIABILITIES:
Accounts payable and accrued expenses		2,396,017
Accounts payable, related parties		448,930
Purchase consideration payable		214,035
Notes payable - related parties		8,500
Notes payable		8,500
Convertible Promissory Note payable - related parties, net		600,000
Total liabilities		3,675,982
Commitments & Contingencies
Convertible Preferred stock, 50,000,000 authorized par $0.001 Series B: 13,108,474 issued and outstanding at December 31, 2016 and June 30, 2016		13,108
Total commitments and contingencies		13,108
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value; 900,000,000 shares authorized; 886,753,846 shares issued and outstanding at December 31, 2016 and at June 30, 2016		886,754
Additional paid-in capital		9,058,605
Accumulated other comprehensive income (loss)		(29,503)
Retained Earnings (Accumulated Deficit)		(64,154)
Total Stockholders' equity		9,851,702
Total liabilities and Stockholders' equity		$ 13,540,793

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Dec. 31, 2016	Jun. 30, 2016
Stockholders equity:
Preferred stock Series B, par value	$ 0.001
Preferred stock Series B, authorized shares	50,000,000
Preferred stock Series B, issued shares	13,108,474
Preferred stock Series B, outstanding shares	13,108,474
Common stock, par value	$ 0.001
Common stock, authorized shares	900,000,000
Common stock, issued shares	886,753,846
Common stock, outstanding shares	886,753,846
As Adjusted
Stockholders equity:
Preferred stock Series B, par value		$ 0.001
Preferred stock Series B, authorized shares		50,000,000
Preferred stock Series B, issued shares		13,108,474
Preferred stock Series B, outstanding shares		13,108,474
Common stock, par value		$ 0.001
Common stock, authorized shares		900,000,000
Common stock, issued shares		886,753,846
Common stock, outstanding shares		886,753,846

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Net revenue
Fund management - Related Party	$ 6,472,531		$ 12,840,475
Food products	1,203,521		2,394,081
Security alarm monitoring	828,114		1,641,660
Other	25,039		89,566
Net revenue	8,529,205		16,965,782
Cost of revenue	1,077,615		2,190,634
Gross profit	7,451,590		14,775,148
Operating expense
General & administrative expense	1,447,595		2,731,254
Fund operations	1,335,265		2,769,467
Marketing	1,051,152		1,831,683
Depreciation	101,188		199,830
Salaries and Compensation	1,909,832		3,260,053
Total operating expenses	5,845,031		10,792,286
Income from Operations	1,606,559		3,982,862
Other income (expense)
Other income	2,636		6,816
Interest income	0		0
Interest expense	(5,711)		(5,689)
Total other (expense) income	(3,075)		1,127
Income before income taxes	1,603,484		3,983,989
Provision of income taxes	(587,038)		(1,657,049)
Net Income	1,016,446		2,326,940
Other Comprehensive Income (Loss)
Foreign currency translation gain (loss)	4,714		(92,581)
Comprehensive Income	$ 1,021,161		$ 2,234,359
Weighted average shares of common stock
Basic	886,753,846		886,753,846
Diluted	1,153,666,000		1,153,666,000
Net income per common share
Basic	$ 0.00		$ 0.00
Diluted	$ 0.00		$ 0.00
As Adjusted
Net revenue
Fund management - Related Party		$ 5,645,696		$ 10,941,614
Food products		996,563		1,610,923
Security alarm monitoring		0		0
Other		(3,500)		117,700
Net revenue		6,638,759		12,670,237
Cost of revenue		680,083		1,248,184
Gross profit		5,958,676		11,422,054
Operating expense
General & administrative expense		1,103,195		3,788,994
Fund operations		1,029,646		1,029,646
Marketing		729,691		1,345,440
Depreciation		58,487		96,676
Salaries and Compensation		1,330,358		1,517,535
Total operating expenses		4,251,378		7,778,291
Income from Operations		1,707,299		3,643,763
Other income (expense)
Other income		4,512		4,393
Interest income		1,604		3,297
Interest expense		0		0
Total other (expense) income		6,116		7,689
Income before income taxes		1,713,414		3,651,452
Provision of income taxes		(764,340)		(1,365,358)
Net Income		949,074		2,286,094
Other Comprehensive Income (Loss)
Foreign currency translation gain (loss)		69,847		(16,357)
Comprehensive Income		$ 1,018,921		$ 2,269,737
Weighted average shares of common stock
Basic		886,753,846		886,753,846
Diluted		1,148,923,323		1,148,923,323
Net income per common share
Basic		$ 0.00		$ 0.00
Diluted		$ 0.00		$ 0.00

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 2,326,940
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	199,830
Loss on disposal of equipment	6,220
(Increase) decrease in current assets:
Accounts receivable	62,600
Accounts receivable - related party	(78,579)
Deferred taxes	(197,188)
Prepaid income taxes	(437,499)
Inventory	(74,549)
Other assets	(86,423)
Increase (decrease) in current liabilities:
Accounts payable & accrued expenses	601,393
Expense waivers payable - related party	490,455
Net cash provided by operating activities	2,813,200
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition of subsidiary net of subsidiary cash acquired	(214,035)
Purchase of equipment	(47,346)
Purchase of investments	(842,994)
Net cash used in investing activities	(1,104,374)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of related party loan	(5,000)
Purchase of treasury stock	0
Net cash used in financing activities	(5,000)
Effect of exchange rate change on cash and cash equivalents	(77,147)
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS	1,626,679
CASH & CASH EQUIVALENTS, BEGINNING BALANCE	5,454,107
CASH & CASH EQUIVALENTS, ENDING BALANCE	7,080,786
Cash paid during the period for:
Interest paid	5,000
Income taxes paid	$ 2,200,800
As Adjusted
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income		$ 2,286,094
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		96,676
Loss on disposal of equipment		0
(Increase) decrease in current assets:
Accounts receivable		189,464
Accounts receivable - related party		(194,989)
Deferred taxes		362,883
Prepaid income taxes		263,368
Inventory		74,140
Other assets		(14,115)
Increase (decrease) in current liabilities:
Accounts payable & accrued expenses		435,981
Expense waivers payable - related party		360,973
Net cash provided by operating activities		3,860,475
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition of subsidiary net of subsidiary cash acquired		(1,519,802)
Purchase of equipment		(110,585)
Purchase of investments		(493,047)
Net cash used in investing activities		(2,123,434)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of related party loan		0
Purchase of treasury stock		(2,200,557)
Net cash used in financing activities		(2,200,557)
Effect of exchange rate change on cash and cash equivalents		(27,677)
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS		(491,193)
CASH & CASH EQUIVALENTS, BEGINNING BALANCE		3,353,274
CASH & CASH EQUIVALENTS, ENDING BALANCE		2,862,081
Cash paid during the period for:
Interest paid		0
Income taxes paid		$ 2,110,000

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1. ORGANIZATION AND DESCRIPTION OF BUSINESS

6 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

ORGANIZATION AND DESCRIPTION OF BUSINESS

Concierge Technologies, Inc., (the “Company” or “Concierge”), a Nevada corporation, was originally incorporated in California on August 18, 1993 as Fanfest, Inc. On March 20, 2002, the Company changed its name to Concierge Technologies, Inc. The Company’s principal operations include Wainwright Holdings, Inc. a Delaware corporation (“Wainwright”). Wainwright is a holding company that currently holds both United States Commodity Funds LLC (“USCF”) and USCF Advisers LLC (“Advisers”), an investment adviser registered under the Investment Advisers Act of 1940, as amended; Gourmet Foods, Ltd. (“Gourmet Foods”), a manufacturer and distributor of meat pies in New Zealand; Brigadier Security Systems (2000) Ltd. (“Brigadier”), a provider of security alarm installation and monitoring located in Canada; and Kahnalytics, Inc. a California corporation(“Kahnalytics”), providing vehicle-based live streaming video and event recording to online subscribers.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Accounting Principles

The Company has prepared the accompanying financial statements on a condensed consolidated basis. In the opinion of management, the accompanying unaudited condensed consolidated balance sheets and related interim statements of income and comprehensive income, and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation, prepared on an accrual basis, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s 2016 Form 10-K filed on October 21, 2016 with the U.S. Securities and Exchange Commission.

Principles of Consolidation

The accompanying unaudited condensed consolidated interim financial statements, which are referred herein as the “Financial Statements” include the accounts of Concierge and its wholly owned subsidiaries, Wainwright, Gourmet Foods, Brigadier and Kahnalytics.

Wainwright was acquired during the current quarter (Refer to Note 11). Due to the commonality of ownership and control between the two companies, the transaction has been accounted for as a transaction between entities under common control. As a result, the assets and liabilities of Wainwright have been considered at their carrying amounts.

The accompanying Financial Statements as of December 31, 2016 and June 30, 2016 and for the three and six month periods ending December 31, 2016 and 2015 include the assets, liabilities and the results of operations of Wainwright at carrying amounts as though the transaction and exchange of equity interests has occurred at the beginning of the comparative period.

All significant inter-company transactions and accounts have been eliminated in consolidation.

Use of Estimates

The preparation of the Financial Statements are in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Other Comprehensive Income (Loss) and Foreign Currency

Comprehensive income (loss) is the total of net income (loss) and other comprehensive income (loss). We record foreign currency translation adjustments and transaction gains and losses in accordance with ASC 830-30, Foreign Currency Translation. The accounts of Gourmet Foods use the New Zealand dollar as the functional currency. The accounts of Brigadier use the Canadian dollar as the functional currency. Assets and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the average exchange rate throughout the period. For the periods ended December 31, 2016 and June 30, 2016, other comprehensive loss consisted of unrealized losses on investments and accumulated translation losses as noted above. Accumulated translation loss, classified as an item of accumulated other comprehensive loss in the stockholders’ equity section of the consolidated balance sheet, was $99,702 as of December 31, 2016.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Concierge’s corporate office maintains cash balances at a financial institution headquartered in San Diego, California. Accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per depositor. The corporation’s uninsured cash balance in the United States was $0 at December 31, 2016. The Company’s subsidiary, Wainwright, also maintains cash balances at various high credit quality institutions and from time to time those deposits exceed the FDIC coverage amount of $250,000. As of December 31, 2016 the uninsured amount totaled $5,673,920, though no losses have been realized and none are expected. Cash balances in Canada are maintained at a financial institution in Saskatoon, Saskatchewan by the Company’s subsidiary. Each account is insured up to CD$100,000 by Canada Deposit Insurance Corporation (CDIC). The Company’s subsidiary had an uninsured cash balance in Canada of CD$438,067 (approximately US$325,988) at December 31, 2016. Balances at financial institutions within certain foreign countries, including New Zealand where the Company’s subsidiary maintains cash balances, are not covered by insurance. As of December 31, 2016, the Company’s subsidiary had uninsured deposits related to cash deposits in uninsured accounts maintained within foreign entities of approximately $335,010. The Company has not experienced any losses in such accounts.

Accounts Receivable, Related Parties

Accounts receivable primarily consists of fund management fees receivable from the Wainwright business. Management fees receivable generally consist of one month of management fees which are collected in the month after they are earned.

Management closely monitors receivables and records an allowance for any balances that are determined to be uncollectible. As of December 31, 2016 and June 30, 2016, the Company considered all remaining accounts receivable to be fully collectible.

Major Customers & Suppliers – Concentration of Credit Risk

Concierge, through Kahnalytics as a licensed user of a proprietary software application, is dependent on the continued support of this online platform and the adherence to the license contract terms between Kahnalytics and the foreign-based licensor. Kahnalytics is also largely dependent on its sales channel to continue to expand its dealer network of resellers who, in turn, activate subscribers to the Kahnalytics service. No single customer accounts for a significant percentage of sales or accounts receivable. Hardware sold by Kahnalytics is currently supplied by one source, however in the event this source proves to be inadequate there are other alternative sources of equal or comparable devices as needed by Kahnalytics. During the six-month period ended December 31, 2015 Kahnalytics had just one customer accounting for 100% of its sales. Correspondingly, Kahnalytics had only two suppliers of the hardware it sold with the larger of the suppliers accounting for 92% of the cost of goods sold for the six-month period ended December 31, 2015. Sales of these products were discontinued during the current fiscal year.

Concierge, through Brigadier, is dependent upon its contractual relationship with the alarm monitoring company who purchases the monitoring contracts and provides monitoring services to Brigadier’s customers. In the event this contract is terminated Brigadier would be compelled to find an alternate source of alarm monitoring, or establish such a facility itself. Management believes that the contractual relationship is sustainable, and has been for many years, with alternate solutions available should the need arise. Sales to the two largest customers, which includes contracts and recurring monthly residuals from the monitoring company, totaled 53% of the total revenues for the six months ended December 31, 2016, and accounted for approximately 26% of accounts receivable as of the balance sheet date of December 31, 2016.

Concierge, through Gourmet Foods, has three major customer groups comprising the gross revenues to Gourmet Foods; 1) grocery, 2) gasoline convenience stores, 3) independent retailers. The grocery and food industry is dominated by several large chain operations, which are customers of Gourmet Foods, and there are no long term guarantees that these major customers will continue to purchase products from Gourmet Foods, however the relationships have been in place for sufficient time to give management reasonable confidence in their continuing business. For the six-month period ending and balance sheet date of December 31, 2016, our largest customer in the grocery industry, who operates through a number of independently branded stores, accounted for approximately 18% of our gross sales revenues and 29% of our accounts receivable. The second largest in the grocery industry accounted for approximately 11% of our gross revenues but less than 10% of our accounts receivable. In the gasoline convenience store market we supply two major accounts. The largest is a marketing consortium of gasoline dealers accounting for approximately 42% of our gross sales revenues and 26% of our accounts receivable. The second largest are independent operators accounting for less than 10% of gross sales but approximately 15% of accounts receivable. The third category of independent retailers accounted for the balance of our gross sales revenue however the group is fragmented and no one customer accounts for a significant portion of our revenues.

For the six months ended December 31, 2015 and the balance sheet date of December 31, 2015 our largest customer in the grocery industry accounted for approximately 13% of revenues and 26% of accounts receivable. For the gasoline convenience store sector, the largest customer is a consortium of independent owners who accounted for approximately 45% of revenues and 20% of accounts receivable (though no single member of the consortium accounted for more than 3% of accounts receivable). Independent retail stores accounted for approximately 12% of revenues however no single store accounted for any significant amount of the accounts receivable. The balance of the revenues and accounts receivable were not dominated by any significant single source for the six months ended December 31, 2015. Gourmet Foods is not dependent upon any one major supplier as many alternative sources are available in the local market place should the need arise.

For our subsidiary, Wainwright, the concentration of risk and the relative reliance on major customers are found within the various funds it manages and the associated accounts receivable as of December 31, 2106 and June 30, 2016 as depicted below.

		December 31, 2016
Fund		Accounts Receivable
USO	$	1,256,213	57%
USCI		445,163	20%
UNG		303,354	14%
All Others		197,954	9%
Total	$	2,202,684	100%
		June 30, 2016
Fund		Accounts Receivable
USO	$	1,245,396	59%
USCI		400,258	19%
UNG		280,431	13%
All Others		198,020	9%
Total	$	2,124,105	100%

Reclassifications

For comparative purposes, prior year’s Financial Statements have been reclassified to conform to report classifications of the current year.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. This pronouncement is effective for annual reporting periods beginning after December 15, 2016, and is to be applied using one of two retrospective application methods, with early application not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements.

In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.  In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company’s consolidated financial statements.

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This update is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not anticipate the adoption of this ASU will have a significant impact on its consolidated financial position, results of operations, or cash flows.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, to mainly change the accounting for investments in equity securities and financial liabilities carried at fair value as well as to modify the presentation and disclosure requirements for financial instruments. The ASU is effective for annual periods beginning after December 15, 2018, with early adoption permitted. Adoption of the ASU is retrospective with a cumulative adjustment to retained earnings or accumulated deficit as of the adoption date. The Company does not anticipate that the adoption of the ASU will have a material impact on its financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share Based Payment Accounting, to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of this newly issued guidance to its consolidated financial statements.

On November 17, 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. It is intended to reduce diversity in the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. The new standard requires that restricted cash and restricted cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017 including interim periods within those fiscal years. Earlier adoption is permitted. The adoption of ASU 2016-18 is not expected to have a material effect on the Company’s consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Clarifying the Definition of a Business, which clarifies and provides a more robust framework to use in determining when a set of assets and activities is a business. The amendments in this update should be applied prospectively on or after the effective date. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those periods. Early adoption is permitted for acquisition or deconsolidation transactions occurring before the issuance date or effective date and only when the transactions have not been reported in issued or made available for issuance financial statements. The Company does not expect the adoption to have any significant impact on its Consolidated Financial Statements.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods. Early adoption is permitted for interim or annual goodwill impairment test performed on testing dates after January 1, 2017. The Company will apply this guidance to applicable impairment tests after the adoption date.

No other recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements.

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3. INVENTORY

6 Months Ended

Dec. 31, 2016

Inventory

INVENTORIES

Inventories consisted of the following:

	December 31,			June 30,
	2016			2016
					As Adjusted
Raw materials	$	46,711		$	50,023
Supplies and packing materials		119,734			77,497
Finished goods		332,366			357,351
		498,811			484,871
Less impairment finished goods		(2,774	)		(48,330	)
Total	$	496,037		$	436,541

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4. PROPERTY AND EQUIPMENT

6 Months Ended

Dec. 31, 2016

Property And Equipment

PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31, 2016 and June 30, 2016:

	December 31, 2016				June 30, 2016
					As Adjusted
Plant and Equipment	$	1,236,138		$	1,477,411
Furniture & Office Equipment		146,076			119,123
Vehicles		82,491			58,850
Total Property and Equipment, Gross		1,464,705			1,655,384
Accumulated Depreciation		(428,660	)		(488,691	)
Total Property and Equipment, Net	$	1,036,045		$	1,166,693

Depreciation expense amounted to $139,873 and $96,676 for the six months ended December 31, 2016 and 2015, respectively.

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5. GOODWILL

6 Months Ended

Dec. 31, 2016

GoodwillAbstract

GOODWILL

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in business combinations. Goodwill comprised of the following amounts:

	December 31,		June 30,
	2016		2016
				As Adjusted
Trained workforce – Gourmet Foods	$	51,978	$	51,978
Trained workforce - Brigadier		75,795		75,795
Goodwill – Gourmet Foods		45,669		45,669
Goodwill - Brigadier		45,814		45,814
	$	219,256	$	219,256

 The Company tests for goodwill impairment at each reporting unit. There was no goodwill impairment for the three months ended December 31, 2016.

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6. INTANGIBLE ASSETS

6 Months Ended

Dec. 31, 2016

Intangible Assets

INTANGIBLE ASSETS

Intangible assets consisted of the following:

		December 31,			June 30,
		2016			2016
					As Adjusted
Brand name	$	402,123		$	402,123
Domain name		36,913			36,913
Customer relationships		500,252			500,252
Non-compete agreement		84,982			84,982
Recipes		21,601			21,601
Total		1,045,871			1,045,871
Less : Accumulated Amortization		(87,615	)		(27,658	)
Net Intangibles	$	958,256		$	1,018,213

CUSTOMER RELATIONSHIP

On August 11, 2015, the Company acquired Gourmet Foods. The fair value on the acquired customer relationships was estimated to be $66,153 and is amortized over the remaining useful life of 10 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired customer relationships was estimated to be $434,098 and is amortized over the remaining useful life of 10 years.

		December 31,			June 30,
		2016		2016
					As Adjusted
Customer relationships	$	500,252		$	500,252
Less: accumulated amortization		(34,877	)		(9,659	)
Total customer relationships, net	$	465,375		$	490,593

BRAND NAME

On August 11, 2015, the Company acquired Gourmet Foods. The fair value on the acquired brand name was estimated to be $61,429 and is amortized over the remaining useful life of 10 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired brand name was estimated to be $340,694 and is amortized over the remaining useful life of 10 years.

		December 31,			June 30,
		2016			2016
					As Adjusted
Brand name	$	402,123		$	402,123
Less: accumulated amortization		(28,719	)		(8,447	)
Total brand name, net	$	373,404		$	393,696

DOMAIN NAME

On August 11, 2015, the Company acquired Gourmet Foods. The fair value on the acquired domain name was estimated to be $21,601 and is amortized over the remaining useful life of 5 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired domain name was estimated to be $15,312 and is amortized over the remaining useful life of 5 years.

		December 31,			June 30,
		2016		2016
					As Adjusted
Domain Name	$	36,913		$	36,913
Less: accumulated amortization		(7,915	)		(4,193	)
Total brand name, net	$	28,998		$	32,720

RECIPES

On August 11, 2015, the Company acquired Gourmet Foods. The fair value on the recipes was estimated to be $21,601 and is amortized over the remaining useful life of 5 years.

		December 31,			June 30,
		2016			2016
					As Adjusted
Recipes	$	21,601		$	21,601
Less: accumulated amortization		(6,115	)		(3,937	)
Total Recipes, net	$	15,486		$	17,664

NON-COMPETE AGREEMENT

On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired non-compete agreement was estimated to be $104,122 and is amortized over the remaining useful life of 5 years.

		December 31,			June 30,
		2016			2016
					As Adjusted
Non-compete agreement	$	84,982		$	84,982
Less: accumulated amortization		(9,989	)		(1,421	)
Total non-compete agreement, net	$	94,993		$	83,561

AMORTIZATION EXPENSE

The total amortization expense for the six months ended December 31, 2016 was $59,957. No amortization was taken for the comparison period ending December 31, 2015.

Estimated amortization expenses of intangible assets for the next five twelve month periods ending December 31, are as follows:

Years Ending December 31,		Expense
2017	$	118,937
2018	$	118,937
2019	$	118,937
2020	$	115,291
2021	$	98,536

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7. OTHER ASSETS

6 Months Ended

Dec. 31, 2016

Other Assets [Abstract]

OTHER ASSETS

Other Current Assets

Other current assets totaling $1,263,521 as of December 31, 2016 and $755,509 as of June 30, 2016 are comprised of various components as listed below.

	As of December 31,		As of June 31,
	2016		2016
				As Adjusted
Deferred tax asset	$	12,727	$	19,501
PrePaid expenses		319,868		242,582
PrePaid income tax		930,926		493,427
Notes receivable		150,000		150,000
Total	$	1,263,521	$	755,509

Investments

Investments are comprised mainly of investments in ETF funds. Wainwright, from time to time, provides initial investments in the creation of ETF funds that Wainwright manages. Wainwright classifies these investments as current assets as these investments are generally sold within one year from the balance sheet date. Investments in which no controlling financial interest or significant influence exists are recorded at fair value with unrealized holding gains and losses included in accumulated other comprehensive income (loss) as a component of stockholders’ equity, except for unrealized losses determined to be other-than-temporary, which are included in the condensed consolidated statements of operations and comprehensive income (loss). Investments in which no controlling financial interest exists, but significant influence exists are recorded as per the Equity Method of Investment. As of December 31, 2016 and June 30, 2016, investments are approximately $0.8 million and $1 thousand, respectively.

Restricted Cash

At December 31, 2016 Gourmet Foods had on deposit NZ$20,000 (approximately US$13,847) securing a lease bond for one of its properties. The cash securing the bond is restricted from access or withdrawal so long as the bond remains in place. There was no bond posted by Gourmet Foods at June 30, 2016, thus the restricted cash amount was zero.

Long Term Assets

Long term assets totaling $1,723,342 and $1,526,154,at December 31, 2016 and June 30, 2016, respectively, were attributed to Wainwright and consisted of

(i)	a $500,980 as of December 31, 2016 and June 30, 2016 representing 10% equity investment in a registered investment adviser accounted for on a cost basis,
(ii)	$1,213,804 as of December 31, 2016 and $1,016,616 as of June 30, 2016 in net deferred tax assets and

(iii) $8,558 as of December 31, 2016 and June 30, 2016 in other assets.

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8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

6 Months Ended

Dec. 31, 2016

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses, included related party payables, consisted of the following:

	December 31, 2016		June 30, 2016
				As Adjusted
Accounts payable	$	1,140,125	$	1,044,026
Accrued judgment		135,000		135,000
Accrued interest		20,369		5,238
Taxes payable		627,920		769,224
Expense waiver – Funds (related party)		939,385		448,930
Deferred rent		16,943		19,202
Accrued payroll and vacation		580,054		127,271
Accrued expenses		421,258		295,955
Total	$	3,881,054	$	2,844,847

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9. RELATED PARTY TRANSACTIONS

6 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

Notes Payable - Related Parties

Current related party notes payable consist of the following:

	December 31, 2016		June 30, 2016
				As Adjusted
Notes payable to shareholder, interest rate of 10%, unsecured and payable on July 31, 2004 (past due)	$	-	$	5,000
Notes payable to shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due)		3,500		3,500
	$	3,500	$	8,500

On July 7, 2016 the Company repaid the outstanding note due to a related party totaling $5,000 in principal and $5,000 in accrued interest. A total of $2,075 in accrued interest was forgiven by the noteholder in settlement of the debt.

Interest expense for all related party notes for the three-month period ending December 31, 2016 and 2015 were $71 and $197 respectively and for the respective six months ended December 31, 2016 and 2015 the interest expense was $141 and $393.

Convertible Promissory Note Payable – Related Parties

On April 8, 2016 the Company entered into a convertible promissory note (the “Promissory Note”) with Gerber Irrevocable Family Trust, an affiliate of our shareholder and CEO, that resulted in the funding of $350,000. The Promissory Note bears interest at four percent (4%) per annum and increases to eight percent (8%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of .01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4 percent annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. The Promissory Note may be prepaid at any time in whole or in part by the Company and is convertible into restricted common stock of the Company at the election of Promissory Note holder on the date which is 180 days following issuance of the Promissory Note at a conversion price of $0.13 per share. The conversion price is subject to adjustment for mergers, consolidations, share exchanges, recapitalizations or similar events. The Promissory Note matures five (5) years from issuance and is unsecured. Proceeds from the Promissory Note are intended to be used for transactions involving acquisitions of unrelated companies by Concierge Technologies that meet the criteria as determined by the Board of Directors. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Note.

On May 25, 2016 the Company entered into a convertible promissory note (the “Promissory Note”) with Schoenberger Family Trust, an affiliate of our shareholder and director, that resulted in the funding of $250,000. The Promissory Note bears interest at four percent (4%) per annum and increases to eight percent (8%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of .01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4 percent annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. The Promissory Note may be prepaid at any time in whole or in part by the Company and is convertible into restricted common stock of the Company at the election of Promissory Note holder on the date which is 180 days following issuance of the Promissory Note at a conversion price of $0.13 per share. The conversion price is subject to adjustment for mergers, consolidations, share exchanges, recapitalizations or similar events. The Promissory Note matures five (5) years from issuance and is unsecured. Proceeds from the Promissory Note are intended to be used for transactions involving acquisitions of unrelated companies by Concierge that meet the criteria as determined by the Board of Directors. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Note.

Interest expense for all related party convertible debentures, for the three months ended December 31, 2016 and 2015 amounted to $2,521 and was $0 respectively.

Wainwright - Related Party Transactions

The Funds managed by USCF and Advisers are deemed by management to be related parties. The Company’s Wainwright revenues, totaled $12,840,475 and $10,941,614 for the six months ended December 31, 2016 and 2015, respectively, were earned from these related parties. Accounts receivable, totaling $2,202,684 and $2,124,105 as of December 31, 2016 and June 30, 2016, respectively, were owed from these related parties. Fund expense waivers, totaling $490,455 and $363,768 for the six months ended December 31, 2016 and 2015, respectively, were incurred on behalf of these related parties. Waivers payable, totaling $939,385 and $448,930 as of December 31, 2016 and June 30, 2016, respectively, were owed to these related parties.

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10. NOTE PAYABLE

6 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

NOTE PAYABLE

An unsecured loan in the amount of $8,500 due a former director and shareholder who is now deceased has been reclassified as a note due unrelated party. The note is interest free, not deemed assignable to successors by the Company, and held as a contingent liability until resolved.

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11. BUSINESS COMBINATIONS

6 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

BUSINESS COMBINATIONS

On May 28, 2015, the Company entered into an agreement to acquire the assets of Gourmet Foods, Ltd., a New Zealand corporation, subject to satisfactory completion of due diligence and other customary criteria for a transaction of this kind. Gourmet Foods is a baker of New Zealand meat pies and other confections distributed to major grocery stores, convenience stores, restaurants and other retailers throughout New Zealand. The Company placed a cash deposit with Gourmet Foods in accordance with the provisions of the asset purchase agreement, however the parties later elected to change the nature of the transaction to a stock purchase agreement. The Stock Purchase Agreement (the “SPA”) was entered into on July 28, 2015 and was set to close on July 31, 2015 subject to final adjustments to accounts receivable, accounts payable, inventory, employee entitlements and other current assets and liabilities. The Company paid a purchase consideration of NZ$2,597,535 (approximately US$1,753,428) in cash. An independent evaluation was conducted in order to obtain a fair market value of the fixed assets and intangible assets acquired. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

On August 11, 2015 the parties reached agreement to close the SPA based on the balance sheet information as of July 31, 2015, subject to further adjustments if necessary once certain balances became known without dispute, and the Company remitted the remainder of the purchase price in cash to an account in New Zealand established for the benefit of the shareholders of Gourmet Foods, Ltd. The operations of Gourmet Foods, Ltd. was consolidated going forward with those of the Company as of August 1, 2015. The following table summarizes the value of the net assets acquired as of the Acquisition Date:

Cash	$	50,695
Accounts Receivable		259,662
Prepaid Expenses		11,246
Inventory		256,271
Property and Equipment		1,207,762
Intangible Assets		170,784
Goodwill		97,647
Total Assets	$	2,054,067
Accounts Payable	$	253,951
Employee Entitlements		46,688
Total Liabilities	$	300,639
Consideration Paid for Net Assets	$	1,753,428

On June 2, 2016 the Company closed a Stock Purchase Agreement transaction which resulted in the acquisition of all the outstanding and issued stock of Brigadier Security Systems, a Canadian corporation located in Saskatoon, Saskatchewan. The total purchase price was CD$2,010,266 (approximately US$1,540,830) in cash, payable in several stages. The consideration of CD$1,000,000 (US$756,859) was paid in cash and CD$733,000 (US$569,935) was deposited in an attorney client trust account in Canadian currency (to be paid to Brigadier, on the 183rd day following the Closing Date if net sales meeting the minimum threshold of $1,500,000 CDN (the "Sales Goal") is achieved. The Sales Goal was achieved and the payment was released on November 23, 2016. The audit of Brigadier resulted in an upwards adjustment of the purchase price by CD$277,266 (US$214,035) which has been recorded as of September 30, 2016 as Purchase Consideration Payable and was subsequently paid in October 2016. Under the acquisition method of accounting, the total purchase consideration is allocated to Brigadier net tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The following table summarizes the value of the net assets acquired as of the Acquisition Date:

Assets
Cash	80,391
Accounts Receivable	431,656
Inventory	238,148
Prepaid Expenses & Other Assets	20,001
Property, plant and equipment	20,455
Intangible Assets	875,087
Goodwill	121,609
Total Assets	1,787,348
Liabilities
Accounts Payable	187,925
Income Tax Payable	55,953
Customer Deposits	2,640
Total Liabilities	246,518
Consideration paid for net assets	1,540,830

On December 9, 2016 the Company closed a Stock Purchase Agreement (the “Purchase Agreement”), by and among the Company and Wainwright and each of the shareholders of Wainwright common stock (the “Wainwright Sellers”), pursuant to which the Wainwright Sellers agreed to sell, and the Company agreed to purchase 1,741 shares of Wainwright common stock, par value $0.01 per share, (the “Wainwright Common Stock”), which represents all of the issued and outstanding Wainwright Common Stock, in exchange for: (i) 818,799,976 shares of Company Common Stock, and (ii) 9,354,119 shares of Company Preferred Stock (which preferred shares are convertible into 187,082,377 shares of Company Common Stock). Wainwright and the Company have a commonality of ownership and control as represented by the shareholdings, either directly or beneficially, of Nicholas Gerber and Scott Schoenberger as a group pursuant to the aforementioned Purchase Agreement and a voting agreement which gives them control of over 50% of Wainwright and over 50% of Concierge both before and after the business combination. Accordingly, the acquisition has been recorded as a transaction between entities under Common Control in the accompanying financial statements . Further, the accompanying financial statements have been adjusted to include the carrying value of assets, liabilities, equity and operations of Wainwright as if the transaction had concluded on July 1, 2015.

The unaudited pro forma financial information below represents the combined results of our operations together with those of Wainwright and as if the Gourmet Foods Limited and Brigadier acquisition had occurred at the beginning of the periods presented. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have occurred if the acquisitions had taken place at the beginning of the period presented, nor is it indicative of future operating results.

	3-mo ended December 31, 2015		6-mo ended December 31, 2015
Revenue	$	7,538,894	$	14,624,581
Income from Operations		1,780,144		3,847,213
Net Income	$	1,009,341	$	2,438,998
Net Income per share available to common stockholders, basic and diluted	$	0.00	$	0.00

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12. COMMITMENTS AND CONTINGENCIES

6 Months Ended

Dec. 31, 2016

Commitments & Contingencies

COMMITMENTS AND CONTINGENCIES

Lease Commitments

Gourmet Foods has operating leases for its office, factory and warehouse facilities located in Tauranga, New Zealand, as well as for certain equipment including vehicles. These leases are generally for three-year terms, with options to renew for additional three-year periods. The leases mature between August 2018 and August 2021, and require monthly rental payments of approximately US$10,891 translated to U.S. currency as of December 31, 2016.

Future minimum lease payments for Gourmet Foods are as follows:

Year Ended June 30,	Lease Amount
2017	$	65,345
2018		130,690
2019		57,707
2020		17,806
2021		1,487
Total Minimum Lease Commitment	$	273,035

Gourmet Foods entered into a General Security Agreement in favor of the Gerald O’Leary Family Trust and registered on the Personal Property Securities Register for a priority sum of NZ$110,000 (approximately US$76,156) to secure the lease of its primary facility. In addition, a NZ$20,000 (approximately US$13,847) bond has been posted through ANZ Bank and secured with a cash deposit of equal amount to secure a separate facilities lease. The General Security Agreement and the cash deposit will remain until such time as the respective leases are satisfactorily terminated in accordance with their terms. Interest from the cash deposit securing the lease accumulates to the benefit of Gourmet Foods and is listed as a component of interest income/expense on the accompanying Consolidated Statements of Operations.

Brigadier leases office and storage facilities in Saskatoon, Saskatchewan as well as vehicles used for installations and service and various office equipment. The minimum lease obligations through their expiry dates are indicated as below and require monthly payments of approximately US$11,455 translated to U.S. currency as of December 31, 2016.

Future minimum lease payments for Brigadier are as follows:

Year Ended June 30,	Lease Amount
2017	$	23,524
2018		32,537
2019		29,826
Total Minimum Lease Commitment	$	85,887

Wainwright leases office space in Oakland, California under an operating lease, which expires in October 2018. Rent expense was $63,994 and $64,648 for the six months ended December 31, 2016 and 2015, respectively.

Future minimum rental payments required under the operating lease, which has remaining non-cancellable lease terms in excess of one year, are as follows:

Year ended June 30,		Lease Amount
2017	$	66,002
2018		134,645
2019		45,322
Total minimum lease commitment	$	245,969

Litigation

On May 6, 2002, a default judgment was awarded to Brookside Investments Ltd. against, jointly and severally, Concierge, Allen E. Kahn, and The Whitehall Companies in the amount of $135,000 plus legal fees. As of May 7, 2012, the judgment had lapsed due to the passage of time and the creditor’s failure to renew. Although a new court action would be required by the plaintiff in order to seek legal remedies, the Company has accrued the amount of $135,000 in the accompanying financial statements as accrued expenses as of December 31, 2016.

From time to time, the Company is involved in legal proceedings arising mainly from the ordinary course of its business. In management’s opinion, the legal proceedings are not expected to have a material effect on the Company’s financial position or results of operations.

Retirement Plan

Wainwright’s wholly owned subsidiary USCF, has a 401(k) Profit Sharing Plan covering its employees who are over 21 years of age and who have completed a minimum of 1,000 hours of service and have worked for USCF for one or more years. Participants may make contributions pursuant to a salary reduction agreement. In addition, USCF makes a safe harbor matching contribution. Annual matching contributions paid totaled approximately $70,000 for each of the six months ended December 31, 2016 and 2015, respectively.

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13. INCOME TAXES

6 Months Ended

Dec. 31, 2016

Income Taxes

INCOME TAXES

The Company accounts for income taxes under the asset and liability method, which recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts, and for net operating losses and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company records a valuation allowance against deferred tax assets when it is more likely than not that such asset will not be realized. The Company continues to monitor the likelihood that it will be able to recover its deferred tax assets. If recovery is not likely, the Company must increase its provision for income taxes by recording a valuation allowance against the deferred tax assets.

The Company accounts for uncertain tax positions in accordance with the authoritative guidance on income taxes under which the Company may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes.

As of December 31, 2016, the Company's total unrecognized tax benefits were approximately $29,000, which would affect the effective tax rate if recognized. The Company will recognize interest and penalties, when they occur, related to uncertain tax provisions as a component of tax expense. There is no interest or penalties to be recognized for the quarter ended December 31, 2016.

The Company is required to make its best estimate of the annual effective tax rate for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis. The Company recorded a tax provision of $1.7 million and $1.4 million from its continuing operations for the six months ended December 31, 2016 and December 31, 2015, respectively. The Company recorded a tax provision of $0.6 million and $0.8 million from its continuing operations for the three months ended December 31, 2016 and December 31, 2015, respectively. The effective tax rate for the six months ended December 31, 2016 and three months ended September 30, 2016 differed from the statutory rate primarily due to the mix of non-deductible meals and entertainment expenses, imputed interest income and decrease in valuation allowance. The effective tax rate could fluctuate in the future due to changes in the taxable income mix between various jurisdictions.

The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company’s tax years 2012 through 2016 will remain open for examination by the federal and state authorities for three and four years, respectively. As of December 31, 2016, there were no active taxing authority examinations.

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14. SEGMENT REPORTING

6 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

SEGMENT REPORTING

With the acquisition of Wainwright Holdings, Gourmet Foods, Ltd. and Brigadier, the Company has identified four segments for its products and services; U.S. investment fund management, U.S. data streaming and hardware, New Zealand and Canada. Our reportable segments are business units located in different global regions. The Company’s operations in the U.S.A. include the gathering of live-streaming video recording data displayed online to subscribers through our wholly owned subsidiary Kahnalytics, Inc. and the income derived from management of various investment funds by our subsidiary Wainwright. In New Zealand operations include the production, packaging and distribution on a commercial scale of gourmet meat pies and related bakery confections through our wholly owned subsidiary Gourmet Foods, Ltd. and in Canada we provide security alarm system installation and monitoring to residential and commercial customers sold through our wholly owned subsidiary Brigadier. Separate management of each segment is required because each business unit is subject to different operational issues and strategies due to their particular regional location. The Company accounts for intra-company sales and expenses as if the sales or expenses were to third parties and eliminates them in the consolidation. Amounts are adjusted for currency translation as of the balance sheet date and presented in US dollars.

The following table presents a summary of identifiable assets as of December 31, 2016 and June 30, 2016:

	As of  December 31, 2016		As of  June 30, 2016
			As Adjusted
Identifiable assets:
Corporate headquarters	$	1,299,226	$	1,521,210
U.S.A. : fund management		12,167,931		8,575,810
U.S.A. : data streaming		82,032		87,790
New Zealand		1,916,937		2,199,128
Canada		1,114,617		956,855
Consolidated	$	16,580,743	$	13,540,793

The following table presents a summary of operating information for the three months ended December 31, 2016 and 2015: (note: Canadian interests had not yet been acquired in 2015)

	3-Months Ended December 31, 2016			3-Months Ended December 31, 2015
				As Adjusted
Revenues from unaffiliated customers:
U.S.A. : data streaming and hardware	$	25,039		$	(3,500	)
U.S.A. : investment fund management		6,472,531			5,645,696
New Zealand : Food Industry		1,203,521			996,563
Canada : Security alarm monitoring		828,114			-
Consolidated	$	8,529,205		$	6,638,759
Net income (loss) after taxes:
Corporate headquarters	$	(158,990	)	$	(43,459	)
U.S.A. : data streaming and hardware		(16,035	)		(4,181	)
U.S.A. : investment fund management		1,068,716			966,764
New Zealand : Food Industry		17,154			29,950
Canada : Security alarm monitoring		105,603			-
Consolidated	$	1,016,446		$	949,074

The following table presents a summary of operating information for the six months ended December 31, 2016 and 2015: (note: New Zealand interest were present for only 5 months in 2015 and Canadian interests had not yet been acquired in 2015)

	6-Months Ended December 31, 2016			6-Months Ended December 31, 2015
				As Adjusted
Revenues from unaffiliated customers:
U.S.A. : data streaming and hardware	$	89,566		$	117,700
U.S.A. : investment fund management		12,840,475			10,941,614
New Zealand : Food Industry		2,394,081			1,610,923
Canada : Security alarm monitoring		1,641,660			-
Consolidated	$	16,965,782		$	12,670,237
Net income (loss) after taxes:
Corporate headquarters	$	(337,906	)	$	(117,161	)
U.S.A. : data streaming and hardware		(32,867	)		(1,817	)
U.S.A. : investment fund management		2,486,232			2,376,828
New Zealand : Food Industry		(7,640	)		28,244
Canada : Security alarm monitoring		219,121			-
Consolidated	$	2,326,940		$	2,286,094

The following table presents a summary of capital expenditures for the six months ended December 31: 

Capital expenditures:	2016		2015
Corporate headquarters	$	-	$	863
New Zealand		43,049		109,722
Canada		4,297		-
Consolidated	$	47,346	$	110,585

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15. REVERSE STOCK SPLIT

6 Months Ended

Dec. 31, 2016

Reverse Stock Split

REVERSE STOCK SPLIT

On November 11, 2015, the Board of Directors (the “Board’) of the Company approved the implementation of a one-for-ten (1:10) reverse stock split of all of the Company’s issued and outstanding common and preferred stock (the “Reverse Stock Split”). The Reverse Stock Split became effective when trading opened on December 15, 2015. The Reverse Stock Split was previously approved by the Company’s shareholders pursuant to a majority written consent and by the Board pursuant to unanimous written consent on February 26, 2015. The approvals provided discretion to the Board to implement the Reverse Stock Split by the end of 2015. The number of the Company’s authorized shares of common stock did not change. All figures have been presented on the basis of reverse split wherever applicable for all the periods presented in these financial statements.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Basis of Presentation and Accounting Principles

The Company has prepared the accompanying financial statements on a condensed consolidated basis. In the opinion of management, the accompanying unaudited condensed consolidated balance sheets and related interim statements of income and comprehensive income, and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation, prepared on an accrual basis, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s 2016 Form 10-K filed on October 21, 2016 with the U.S. Securities and Exchange Commission.

Principles of Consolidation

The accompanying unaudited condensed consolidated interim financial statements, which are referred herein as the “Financial Statements” include the accounts of Concierge and its wholly owned subsidiaries, Wainwright, Gourmet Foods, Brigadier and Kahnalytics.

Wainwright was acquired during the current quarter (Refer to Note 11). Due to the commonality of ownership and control between the two companies, the transaction has been accounted for as a transaction between entities under common control. As a result, the assets and liabilities of Wainwright have been considered at their carrying amounts.

The accompanying Financial Statements as of December 31, 2016 and June 30, 2016 and for the three and six month periods ending December 31, 2016 and 2015 include the assets, liabilities and the results of operations of Wainwright at carrying amounts as though the transaction and exchange of equity interests has occurred at the beginning of the comparative period.

All significant inter-company transactions and accounts have been eliminated in consolidation.

Use of Estimates

The preparation of the Financial Statements are in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Other Comprehensive Income (Loss) and Foreign Currency

Comprehensive income (loss) is the total of net income (loss) and other comprehensive income (loss). We record foreign currency translation adjustments and transaction gains and losses in accordance with ASC 830-30, Foreign Currency Translation. The accounts of Gourmet Foods use the New Zealand dollar as the functional currency. The accounts of Brigadier use the Canadian dollar as the functional currency. Assets and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the average exchange rate throughout the period. For the periods ended December 31, 2016 and June 30, 2016, other comprehensive loss consisted of unrealized losses on investments and accumulated translation losses as noted above. Accumulated translation loss, classified as an item of accumulated other comprehensive loss in the stockholders’ equity section of the consolidated balance sheet, was $99,702 as of December 31, 2016.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Concierge’s corporate office maintains cash balances at a financial institution headquartered in San Diego, California. Accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per depositor. The corporation’s uninsured cash balance in the United States was $0 at December 31, 2016. The Company’s subsidiary, Wainwright, also maintains cash balances at various high credit quality institutions and from time to time those deposits exceed the FDIC coverage amount of $250,000. As of December 31, 2016 the uninsured amount totaled $5,673,920, though no losses have been realized and none are expected. Cash balances in Canada are maintained at a financial institution in Saskatoon, Saskatchewan by the Company’s subsidiary. Each account is insured up to CD$100,000 by Canada Deposit Insurance Corporation (CDIC). The Company’s subsidiary had an uninsured cash balance in Canada of CD$438,067 (approximately US$325,988) at December 31, 2016. Balances at financial institutions within certain foreign countries, including New Zealand where the Company’s subsidiary maintains cash balances, are not covered by insurance. As of December 31, 2016, the Company’s subsidiary had uninsured deposits related to cash deposits in uninsured accounts maintained within foreign entities of approximately $335,010. The Company has not experienced any losses in such accounts.

Accounts Receivable, Related Parties

Accounts receivable primarily consists of fund management fees receivable from the Wainwright business. Management fees receivable generally consist of one month of management fees which are collected in the month after they are earned.

Management closely monitors receivables and records an allowance for any balances that are determined to be uncollectible. As of December 31, 2016 and June 30, 2016, the Company considered all remaining accounts receivable to be fully collectible.

Major Customers & Suppliers – Concentration of Credit Risk

Concierge, through Kahnalytics as a licensed user of a proprietary software application, is dependent on the continued support of this online platform and the adherence to the license contract terms between Kahnalytics and the foreign-based licensor. Kahnalytics is also largely dependent on its sales channel to continue to expand its dealer network of resellers who, in turn, activate subscribers to the Kahnalytics service. No single customer accounts for a significant percentage of sales or accounts receivable. Hardware sold by Kahnalytics is currently supplied by one source, however in the event this source proves to be inadequate there are other alternative sources of equal or comparable devices as needed by Kahnalytics. During the six-month period ended December 31, 2015 Kahnalytics had just one customer accounting for 100% of its sales. Correspondingly, Kahnalytics had only two suppliers of the hardware it sold with the larger of the suppliers accounting for 92% of the cost of goods sold for the six-month period ended December 31, 2015. Sales of these products were discontinued during the current fiscal year.

Concierge, through Brigadier, is dependent upon its contractual relationship with the alarm monitoring company who purchases the monitoring contracts and provides monitoring services to Brigadier’s customers. In the event this contract is terminated Brigadier would be compelled to find an alternate source of alarm monitoring, or establish such a facility itself. Management believes that the contractual relationship is sustainable, and has been for many years, with alternate solutions available should the need arise. Sales to the two largest customers, which includes contracts and recurring monthly residuals from the monitoring company, totaled 53% of the total revenues for the six months ended December 31, 2016, and accounted for approximately 26% of accounts receivable as of the balance sheet date of December 31, 2016.

Concierge, through Gourmet Foods, has three major customer groups comprising the gross revenues to Gourmet Foods; 1) grocery, 2) gasoline convenience stores, 3) independent retailers. The grocery and food industry is dominated by several large chain operations, which are customers of Gourmet Foods, and there are no long term guarantees that these major customers will continue to purchase products from Gourmet Foods, however the relationships have been in place for sufficient time to give management reasonable confidence in their continuing business. For the six-month period ending and balance sheet date of December 31, 2016, our largest customer in the grocery industry, who operates through a number of independently branded stores, accounted for approximately 18% of our gross sales revenues and 29% of our accounts receivable. The second largest in the grocery industry accounted for approximately 11% of our gross revenues but less than 10% of our accounts receivable. In the gasoline convenience store market we supply two major accounts. The largest is a marketing consortium of gasoline dealers accounting for approximately 42% of our gross sales revenues and 26% of our accounts receivable. The second largest are independent operators accounting for less than 10% of gross sales but approximately 15% of accounts receivable. The third category of independent retailers accounted for the balance of our gross sales revenue however the group is fragmented and no one customer accounts for a significant portion of our revenues.

For the six months ended December 31, 2015 and the balance sheet date of December 31, 2015 our largest customer in the grocery industry accounted for approximately 13% of revenues and 26% of accounts receivable. For the gasoline convenience store sector, the largest customer is a consortium of independent owners who accounted for approximately 45% of revenues and 20% of accounts receivable (though no single member of the consortium accounted for more than 3% of accounts receivable). Independent retail stores accounted for approximately 12% of revenues however no single store accounted for any significant amount of the accounts receivable. The balance of the revenues and accounts receivable were not dominated by any significant single source for the six months ended December 31, 2015. Gourmet Foods is not dependent upon any one major supplier as many alternative sources are available in the local market place should the need arise.

For our subsidiary, Wainwright, the concentration of risk and the relative reliance on major customers are found within the various funds it manages and the associated accounts receivable as of December 31, 2106 and June 30, 2016 as depicted below.

		December 31, 2016
Fund		Accounts Receivable
USO	$	1,256,213	57%
USCI		445,163	20%
UNG		303,354	14%
All Others		197,954	9%
Total	$	2,202,684	100%
		June 30, 2016
Fund		Accounts Receivable
USO	$	1,245,396	59%
USCI		400,258	19%
UNG		280,431	13%
All Others		198,020	9%
Total	$	2,124,105	100%

Reclassifications

For comparative purposes, prior year’s Financial Statements have been reclassified to conform to report classifications of the current year.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. This pronouncement is effective for annualreporting periods beginning after December 15, 2016, and is to be applied using one of two retrospective application methods, with early application not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements.

In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805). Topic 805 requires that an acquirer retrospectively adjust provisional amounts recognized in a business combination, during the measurement period. To simplify the accounting for adjustments made to provisional amounts, the amendments in the Update require that the acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amount is determined. The acquirer is required to also record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.  In addition an entity is required to present separately on the face of the income statement or disclose in the notes to the financial statements the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for fiscal years beginning December 15, 2015. The adoption of ASU 2015-016 is not expected to have a material effect on the Company’s consolidated financial statements.

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. The new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This update is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company does not anticipate the adoption of this ASU will have a significant impact on its consolidated financial position, results of operations, or cash flows.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, to mainly change the accounting for investments in equity securities and financial liabilities carried at fair value as well as to modify the presentation and disclosure requirements for financial instruments. The ASU is effective for annual periods beginning after December 15, 2018, with early adoption permitted. Adoption of the ASU is retrospective with a cumulative adjustment to retained earnings or accumulated deficit as of the adoption date. The Company does not anticipate that the adoption of the ASU will have a material impact on its financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The guidance in ASU No. 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases (FAS 13). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share Based Payment Accounting, to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of this newly issued guidance to its consolidated financial statements.

On November 17, 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. It is intended to reduce diversity in the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. The new standard requires that restricted cash and restricted cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017 including interim periods within those fiscal years. Earlier adoption is permitted. The adoption of ASU 2016-18 is not expected to have a material effect on the Company’s consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Clarifying the Definition of a Business, which clarifies and provides a more robust framework to use in determining when a set of assets and activities is a business. The amendments in this update should be applied prospectively on or after the effective date. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those periods. Early adoption is permitted for acquisition or deconsolidation transactions occurring before the issuance date or effective date and only when the transactions have not been reported in issued or made available for issuance financial statements. The Company does not expect the adoption to have any significant impact on its Consolidated Financial Statements.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods. Early adoption is permitted for interim or annual goodwill impairment test performed on testing dates after January 1, 2017. The Company will apply this guidance to applicable impairment tests after the adoption date.

No other recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Dec. 31, 2016

Summary Of Significant Accounting Policies Tables

Concentration risk

		December 31, 2016
Fund		Accounts Receivable
USO	$	1,256,213	57%
USCI		445,163	20%
UNG		303,354	14%
All Others		197,954	9%
Total	$	2,202,684	100%
		June 30, 2016
Fund		Accounts Receivable
USO	$	1,245,396	59%
USCI		400,258	19%
UNG		280,431	13%
All Others		198,020	9%
Total	$	2,124,105	100%

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3. INVENTORY (Tables)

6 Months Ended

Dec. 31, 2016

Inventory Tables

Inventories

	December 31,			June 30,
	2016			2016
					As Adjusted
Raw materials	$	46,711		$	50,023
Supplies and packing materials		119,734			77,497
Finished goods		332,366			357,351
		498,811			484,871
Less impairment finished goods		(2,774	)		(48,330	)
Total	$	496,037		$	436,541

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4. PROPERTY AND EQUIPMENT (Tables)

6 Months Ended

Dec. 31, 2016

Property And Equipment Tables

PROPERTY AND EQUIPMENT

	December 31, 2016				June 30, 2016
					As Adjusted
Plant and Equipment	$	1,236,138		$	1,477,411
Furniture & Office Equipment		146,076			119,123
Vehicles		82,491			58,850
Total Property and Equipment, Gross		1,464,705			1,655,384
Accumulated Depreciation		(428,660	)		(488,691	)
Total Property and Equipment, Net	$	1,036,045		$	1,166,693

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5. GOODWILL (Tables)

6 Months Ended

Dec. 31, 2016

Goodwill Tables

Goodwill

	December 31,		June 30,
	2016		2016
				As Adjusted
Trained workforce – Gourmet Foods	$	51,978	$	51,978
Trained workforce - Brigadier		75,795		75,795
Goodwill – Gourmet Foods		45,669		45,669
Goodwill - Brigadier		45,814		45,814
	$	219,256	$	219,256

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6. INTANGIBLE ASSETS (Tables)

6 Months Ended

Dec. 31, 2016

Intangible Assets Tables

Intangible assets

		December 31,			June 30,
		2016			2016
					As Adjusted
Brand name	$	402,123		$	402,123
Domain name		36,913			36,913
Customer relationships		500,252			500,252
Non-compete agreement		84,982			84,982
Recipes		21,601			21,601
Total		1,045,871			1,045,871
Less : Accumulated Amortization		(87,615	)		(27,658	)
Net Intangibles	$	958,256		$	1,018,213

Customer relationships

		December 31,			June 30,
		2016		2016
					As Adjusted
Customer relationships	$	500,252		$	500,252
Less: accumulated amortization		(34,877	)		(9,659	)
Total customer relationships, net	$	465,375		$	490,593

Brand Name

		December 31,			June 30,
		2016			2016
					As Adjusted
Brand name	$	402,123		$	402,123
Less: accumulated amortization		(28,719	)		(8,447	)
Total brand name, net	$	373,404		$	393,696

Domain Name

		December 31,			June 30,
		2016		2016
					As Adjusted
Domain Name	$	36,913		$	36,913
Less: accumulated amortization		(7,915	)		(4,193	)
Total brand name, net	$	28,998		$	32,720

Recipes

		December 31,			June 30,
		2016			2016
					As Adjusted
Recipes	$	21,601		$	21,601
Less: accumulated amortization		(6,115	)		(3,937	)
Total Recipes, net	$	15,486		$	17,664

Non-Compete Agreements

		December 31,			June 30,
		2016			2016
					As Adjusted
Non-compete agreement	$	84,982		$	84,982
Less: accumulated amortization		(9,989	)		(1,421	)
Total non-compete agreement, net	$	94,993		$	83,561

Amortization Expense

Years Ending December 31,		Expense
2017	$	118,937
2018	$	118,937
2019	$	118,937
2020	$	115,291
2021	$	98,536

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7. OTHER ASSETS (Tables)

6 Months Ended

Dec. 31, 2016

Other Assets Tables

Other assets

	As of December 31,		As of June 31,
	2016		2016
				As Adjusted
Deferred tax asset	$	12,727	$	19,501
PrePaid expenses		319,868		242,582
PrePaid income tax		930,926		493,427
Notes receivable		150,000		150,000
Total	$	1,263,521	$	755,509

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8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)

6 Months Ended

Dec. 31, 2016

Payables and Accruals [Abstract]

Accounts payable and accrued expenses

	December 31, 2016		June 30, 2016
				As Adjusted
Accounts payable	$	1,140,125	$	1,044,026
Accrued judgment		135,000		135,000
Accrued interest		20,369		5,238
Taxes payable		627,920		769,224
Expense waiver – Funds (related party)		939,385		448,930
Deferred rent		16,943		19,202
Accrued payroll and vacation		580,054		127,271
Accrued expenses		421,258		295,955
Total	$	3,881,054	$	2,844,847

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9. RELATED PARTY TRANSACTIONS (Tables)

6 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

Current related party notes payable

	December 31, 2016		June 30, 2016
				As Adjusted
Notes payable to shareholder, interest rate of 10%, unsecured and payable on July 31, 2004 (past due)	$	-	$	5,000
Notes payable to shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due)		3,500		3,500
	$	3,500	$	8,500

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11. BUSINESS COMBINATIONS (Tables)

6 Months Ended

Dec. 31, 2016

Business Combinations Tables

Fair value estimate of the net assets acquired

Cash	$	50,695
Accounts Receivable		259,662
Prepaid Expenses		11,246
Inventory		256,271
Property and Equipment		1,207,762
Intangible Assets		170,784
Goodwill		97,647
Total Assets	$	2,054,067
Accounts Payable	$	253,951
Employee Entitlements		46,688
Total Liabilities	$	300,639
Consideration Paid for Net Assets	$	1,753,428

Assets
Cash	80,391
Accounts Receivable	431,656
Inventory	238,148
Prepaid Expenses & Other Assets	20,001
Property, plant and equipment	20,455
Intangible Assets	875,087
Goodwill	121,609
Total Assets	1,787,348
Liabilities
Accounts Payable	187,925
Income Tax Payable	55,953
Customer Deposits	2,640
Total Liabilities	246,518
Consideration paid for net assets	1,540,830

Proforma results

	3-mo ended December 31, 2015		6-mo ended December 31, 2015
Revenue	$	7,538,894	$	14,624,581
Income from Operations		1,780,144		3,847,213
Net Income	$	1,009,341	$	2,438,998
Net Income per share available to common stockholders, basic and diluted	$	0.00	$	0.00

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12. COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Dec. 31, 2016

Commitments And Contingencies Tables

Future minimum lease payments

Future minimum lease payments for Gourmet Foods are as follows:

Year Ended June 30,	Lease Amount
2017	$	65,345
2018		130,690
2019		57,707
2020		17,806
2021		1,487
Total Minimum Lease Commitment	$	273,035

Future minimum lease payments for Brigadier are as follows:

Year Ended June 30,	Lease Amount
2017	$	23,524
2018		32,537
2019		29,826
Total Minimum Lease Commitment	$	85,887

Future minimum rental payments required under the operating lease, which has remaining non-cancellable lease terms in excess of one year, are as follows:

Year ended June 30,		Lease Amount
2017	$	66,002
2018		134,645
2019		45,322
Total minimum lease commitment	$	245,969

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14. SEGMENT REPORTING (Tables)

6 Months Ended

Dec. 31, 2016

Segment Reporting Tables

Segments

The following table presents a summary of identifiable assets as of December 31, 2016 and June 30, 2016:

	As of  December 31, 2016		As of  June 30, 2016
			As Adjusted
Identifiable assets:
Corporate headquarters	$	1,299,226	$	1,521,210
U.S.A. : fund management		12,167,931		8,575,810
U.S.A. : data streaming		82,032		87,790
New Zealand		1,916,937		2,199,128
Canada		1,114,617		956,855
Consolidated	$	16,580,743	$	13,540,793

The following table presents a summary of operating information for the three months ended December 31, 2016 and 2015: (note: Canadian interests had not yet been acquired in 2015)

	3-Months Ended December 31, 2016			3-Months Ended December 31, 2015
				As Adjusted
Revenues from unaffiliated customers:
U.S.A. : data streaming and hardware	$	25,039		$	(3,500	)
U.S.A. : investment fund management		6,472,531			5,645,696
New Zealand : Food Industry		1,203,521			996,563
Canada : Security alarm monitoring		828,114			-
Consolidated	$	8,529,205		$	6,638,759
Net income (loss) after taxes:
Corporate headquarters	$	(158,990	)	$	(43,459	)
U.S.A. : data streaming and hardware		(16,035	)		(4,181	)
U.S.A. : investment fund management		1,068,716			966,764
New Zealand : Food Industry		17,154			29,950
Canada : Security alarm monitoring		105,603			-
Consolidated	$	1,016,446		$	949,074

The following table presents a summary of operating information for the six months ended December 31, 2016 and 2015: (note: New Zealand interest were present for only 5 months in 2015 and Canadian interests had not yet been acquired in 2015)

	6-Months Ended December 31, 2016			6-Months Ended December 31, 2015
				As Adjusted
Revenues from unaffiliated customers:
U.S.A. : data streaming and hardware	$	89,566		$	117,700
U.S.A. : investment fund management		12,840,475			10,941,614
New Zealand : Food Industry		2,394,081			1,610,923
Canada : Security alarm monitoring		1,641,660			-
Consolidated	$	16,965,782		$	12,670,237
Net income (loss) after taxes:
Corporate headquarters	$	(337,906	)	$	(117,161	)
U.S.A. : data streaming and hardware		(32,867	)		(1,817	)
U.S.A. : investment fund management		2,486,232			2,376,828
New Zealand : Food Industry		(7,640	)		28,244
Canada : Security alarm monitoring		219,121			-
Consolidated	$	2,326,940		$	2,286,094

The following table presents a summary of capital expenditures for the six months ended December 31: 

Capital expenditures:	2016		2015
Corporate headquarters	$	-	$	863
New Zealand		43,049		109,722
Canada		4,297		-
Consolidated	$	47,346	$	110,585

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2016	Jun. 30, 2016
Accounts receivable	$ 2,202,684
Accounts receivable concentration risk percent	100.00%
As Adjusted
Accounts receivable		$ 2,124,105
Accounts receivable concentration risk percent		100.00%
USO
Accounts receivable	$ 1,256,213	$ 1,245,396
Accounts receivable concentration risk percent	57.00%	59.00%
USCI
Accounts receivable	$ 445,163	$ 400,258
Accounts receivable concentration risk percent	20.00%	19.00%
UNG
Accounts receivable	$ 303,354	$ 280,431
Accounts receivable concentration risk percent	14.00%	13.00%
All Others
Accounts receivable	$ 197,954	$ 198,020
Accounts receivable concentration risk percent	9.00%	9.00%

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3. INVENTORY (Details) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2016	Jun. 30, 2016
Raw materials	$ 46,711
Supplies and packing materials	119,734
Finished goods	332,366
Subtotal	498,811
Less: Impairment of Finished Goods	(2,774)
Total	$ 496,037
As Adjusted
Raw materials		$ 50,023
Supplies and packing materials		77,497
Finished goods		357,351
Subtotal		484,871
Less: Impairment of Finished Goods		(48,330)
Total		$ 436,541

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4. PROPERTY AND EQUIPMENT (Details) - USD ($)	Dec. 31, 2016	Jun. 30, 2016
Total Property and Equipment, Gross	$ 1,464,705
Accumulated depreciation	(428,660)
Total Property and Equipment, Net	1,036,045
As Adjusted
Total Property and Equipment, Gross		$ 1,655,384
Accumulated depreciation		(488,691)
Total Property and Equipment, Net		1,166,693
Plant and Equipment [Member]
Total Property and Equipment, Gross	1,236,138
Plant and Equipment [Member] | As Adjusted
Total Property and Equipment, Gross		1,477,411
Furniture & Office EquipmentMember]
Total Property and Equipment, Gross	146,076
Furniture & Office EquipmentMember] | As Adjusted
Total Property and Equipment, Gross		119,123
Vehicles [Member]
Total Property and Equipment, Gross	$ 82,491
Vehicles [Member] | As Adjusted
Total Property and Equipment, Gross		$ 58,850

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4. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Property And Equipment Details Narrative
Depreciation expense	$ 139,873	$ 96,676

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5. GOODWILL (Details) - USD ($)	Dec. 31, 2016	Jun. 30, 2016
Goodwill, net	$ 219,256
As Adjusted
Goodwill, net		$ 219,256
Trained Workforce Gourmet Foods
Goodwill, net	51,978
Trained Workforce Gourmet Foods | As Adjusted
Goodwill, net		51,978
Trained Workforce Brigadier
Goodwill, net	75,795
Trained Workforce Brigadier | As Adjusted
Goodwill, net		75,795
Goodwill Gourmet Foods
Goodwill, net	45,669
Goodwill Gourmet Foods | As Adjusted
Goodwill, net		45,669
Goodwill Brigadier
Goodwill, net	$ 45,814
Goodwill Brigadier | As Adjusted
Goodwill, net		$ 45,814

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6. INTANGIBLE ASSETS (Details) - USD ($)	Dec. 31, 2016	Jun. 30, 2016
Intangible assets, gross	$ 1,045,871
Less: Accumulated depreciation	(87,615)
Net intangibles	958,256
As Adjusted
Intangible assets, gross		$ 1,045,871
Less: Accumulated depreciation		(27,658)
Net intangibles		1,018,213
Brand name [Member]
Intangible assets, gross	402,123
Less: Accumulated depreciation	(28,719)
Net intangibles	373,404
Brand name [Member] | As Adjusted
Intangible assets, gross		402,123
Less: Accumulated depreciation		(8,447)
Net intangibles		393,696
Domain Name [Member]
Intangible assets, gross	36,913
Less: Accumulated depreciation	(7,915)
Net intangibles	28,998
Domain Name [Member] | As Adjusted
Intangible assets, gross		36,913
Less: Accumulated depreciation		(4,193)
Net intangibles		32,720
Customer Relationships [Member]
Intangible assets, gross	500,252
Less: Accumulated depreciation	(34,877)
Net intangibles	465,375
Customer Relationships [Member] | As Adjusted
Intangible assets, gross		500,252
Less: Accumulated depreciation		(9,659)
Net intangibles		490,593
Non-compete agreement [Member]
Intangible assets, gross	84,982
Less: Accumulated depreciation	(9,989)
Net intangibles	94,993
Non-compete agreement [Member] | As Adjusted
Intangible assets, gross		84,982
Less: Accumulated depreciation		(1,421)
Net intangibles		83,561
Recipes [Member]
Intangible assets, gross	21,601
Less: Accumulated depreciation	(6,115)
Net intangibles	$ 15,486
Recipes [Member] | As Adjusted
Intangible assets, gross		21,601
Less: Accumulated depreciation		(3,937)
Net intangibles		$ 17,664

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6. INTANGIBLE ASSETS (Details 1) - USD ($)	Dec. 31, 2016	Jun. 30, 2016
Intangible asset gross	$ 1,045,871
Less: Accumulated depreciation	(87,615)
Intangible assets, net	958,256
As Adjusted
Intangible asset gross		$ 1,045,871
Less: Accumulated depreciation		(27,658)
Intangible assets, net		1,018,213
Customer Relationships [Member]
Intangible asset gross	500,252
Less: Accumulated depreciation	(34,877)
Intangible assets, net	465,375
Customer Relationships [Member] | As Adjusted
Intangible asset gross		500,252
Less: Accumulated depreciation		(9,659)
Intangible assets, net		490,593
Brand name [Member]
Intangible asset gross	402,123
Less: Accumulated depreciation	(28,719)
Intangible assets, net	373,404
Brand name [Member] | As Adjusted
Intangible asset gross		402,123
Less: Accumulated depreciation		(8,447)
Intangible assets, net		393,696
Domain Name [Member]
Intangible asset gross	36,913
Less: Accumulated depreciation	(7,915)
Intangible assets, net	28,998
Domain Name [Member] | As Adjusted
Intangible asset gross		36,913
Less: Accumulated depreciation		(4,193)
Intangible assets, net		32,720
Recipes [Member]
Intangible asset gross	21,601
Less: Accumulated depreciation	(6,115)
Intangible assets, net	15,486
Recipes [Member] | As Adjusted
Intangible asset gross		21,601
Less: Accumulated depreciation		(3,937)
Intangible assets, net		17,664
Non-compete agreement [Member]
Intangible asset gross	84,982
Less: Accumulated depreciation	(9,989)
Intangible assets, net	$ 94,993
Non-compete agreement [Member] | As Adjusted
Intangible asset gross		84,982
Less: Accumulated depreciation		(1,421)
Intangible assets, net		$ 83,561

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6. INTANGIBLE ASSETS (Details 2)	Dec. 31, 2016 USD ($)
Intangible Assets Details 2
2017	$ 118,937
2018	118,937
2019	118,937
2020	115,291
2021	$ 98,536

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7. OTHER ASSETS (Details) - USD ($)	Dec. 31, 2016	Jun. 30, 2016
Deferred tax asset	$ 12,727
PrePaid expenses	319,868
PrePaid income tax	930,926
Notes receivable	150,000
Other current assets	$ 1,263,521
As Adjusted
Deferred tax asset		$ 19,501
PrePaid expenses		242,582
PrePaid income tax		493,427
Notes receivable		150,000
Other current assets		$ 755,509

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8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Dec. 31, 2016	Jun. 30, 2016
Accounts payable	$ 1,140,125
Accrued judgment	135,000
Accrued interest	20,369
Taxes payable	627,920
Expense waiver - Funds (related party)	939,385
Deferred rent	16,943
Accrued payroll and vacation	580,054
Accrued Expenses	421,258
Total	$ 3,881,054
As Adjusted
Accounts payable		$ 1,044,026
Accrued judgment		135,000
Accrued interest		5,238
Taxes payable		769,224
Expense waiver - Funds (related party)		448,930
Deferred rent		19,202
Accrued payroll and vacation		127,271
Accrued Expenses		295,955
Total		$ 2,844,847

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9. RELATED PARTY TRANSACTIONS (Details) - USD ($)	Dec. 31, 2016	Jun. 30, 2016
Notes payable to shareholder, interest rate of 10%, unsecured and payable on July 31, 2004 (past due)	$ 0
Notes payable to shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due)	3,500
Notes payable - related parties	$ 3,500
As Adjusted
Notes payable to shareholder, interest rate of 10%, unsecured and payable on July 31, 2004 (past due)		$ 5,000
Notes payable to shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due)		3,500
Notes payable - related parties		$ 8,500

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11. BUSINESS COMBINATIONS (Details)	Dec. 31, 2016 USD ($)
Gourmet Foods
Cash	$ 50,695
Accounts Receivable	259,662
Prepaid Expenses & Other Assets	11,246
Inventory	256,271
Property and Equipment	1,207,762
Intangible Assets	170,784
Goodwill	97,647
Total Assets	2,054,067
Accounts Payable	253,951
Employee Entitlements	46,688
Total Liabilities	300,639
Consideration Paid for Net Assets	1,753,428
Brigadier
Cash	80,391
Accounts Receivable	431,656
Prepaid Expenses & Other Assets	20,001
Inventory	238,148
Property and Equipment	20,455
Intangible Assets	875,087
Goodwill	121,609
Total Assets	1,787,348
Accounts Payable	187,925
Income Tax Payable	55,953
Customer Deposits	2,640
Total Liabilities	246,518
Consideration Paid for Net Assets	$ 1,540,830

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11. BUSINESS COMBINATIONS (Details 1) - USD ($)	3 Months Ended	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2015
Business Combinations Details 1
Revenue	$ 7,538,894	$ 14,624,581
Income from operations	1,780,144	3,847,213
Net Income	$ 1,009,341	$ 2,438,998
Net Income per share available to common stockholders, basic and diluted	$ 0.00	$ 0.00

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12. COMMITMENTS AND CONTINGENCIES (Details)	Dec. 31, 2016 USD ($)
2017	$ 66,002
2018	134,645
2019	45,322
Total Minimum Lease Commitment	245,969
Gourmet Foods
2017	65,345
2018	130,690
2019	57,707
2020	17,806
2021	1,487
Total Minimum Lease Commitment	273,035
Brigadier
2017	23,524
2018	32,537
2019	29,826
Total Minimum Lease Commitment	$ 85,887

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14. SEGMENT REPORTING (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Jun. 30, 2016
Identifiable assets	$ 16,580,743		$ 16,580,743
Revenues	8,529,205		16,965,782
As Adjusted
Identifiable assets					$ 13,540,793
Revenues		$ 6,638,759		$ 12,670,237
Corporate Headquarters
Identifiable assets	1,299,226		1,299,226
Net income (loss) after tax	(158,990)		(337,906)
Capital expenditures			0
Corporate Headquarters | As Adjusted
Identifiable assets					1,521,210
Net income (loss) after tax		(43,459)		(117,161)
Capital expenditures				863
U.S.A. investment fund management
Identifiable assets	82,032		82,032
Revenues	6,472,531		12,840,475
Net income (loss) after tax	1,068,716		2,486,232
U.S.A. investment fund management | As Adjusted
Identifiable assets					8,575,810
Revenues		5,645,696		10,941,614
Net income (loss) after tax		966,764		2,376,828
U.S.A. data streaming and hardware
Identifiable assets	12,167,931		12,167,931
Revenues	25,039		89,566
Net income (loss) after tax	(16,035)		(32,867)
U.S.A. data streaming and hardware | As Adjusted
Identifiable assets					87,790
Revenues		(3,500)		117,700
Net income (loss) after tax		(4,181)		(1,817)
New Zealand
Identifiable assets	1,916,937		1,916,937
Revenues	1,203,521		2,394,081
Net income (loss) after tax	17,154		(7,640)
Capital expenditures			43,049
New Zealand | As Adjusted
Identifiable assets					2,199,128
Revenues		996,563		1,610,923
Net income (loss) after tax		29,950		28,244
Capital expenditures				109,722
Canada
Identifiable assets	1,114,617		1,114,617
Revenues	828,114		1,641,660
Net income (loss) after tax	105,603		219,121
Capital expenditures			4,297
Canada | As Adjusted
Identifiable assets					956,855
Revenues		0		0
Net income (loss) after tax		0		0
Capital expenditures				0
Consolidated
Identifiable assets	16,580,743		16,580,743
Revenues	8,529,205		16,965,782
Net income (loss) after tax	$ 1,016,446		2,326,940
Capital expenditures			$ 47,346
Consolidated | As Adjusted
Identifiable assets					$ 13,540,793
Revenues		6,638,759		12,670,237
Net income (loss) after tax		$ 949,074		2,286,094
Capital expenditures				$ 110,858